SBA navigates short term headwinds, playing the long game. SBA Communications' (NASDAQ: SBAC) 3Q26 performance reflects its long-term focus despite short-term headwinds. Underlying tower leasing and AFFO were strong, though reported revenue, AFFO per share and site development activity declined year-over-year. Moreover, SBA continued rationalizing its international portfolio as it anticipates another wave of U.S. wireless infrastructure investment. Site leasing revenue rose just over one percent YoY to $665 million, or less than one percent excluding foreign exchange. Site development revenue fell 36 percent to $49 million on weaker services and construction activity. Adjusted EBITDA declined one percent to $488 million despite improved margins. U.S. leasing activity and carrier demand were soft, particularly at T-Mobile and AT&T, according to Inside Towers Intelligence analyses. T-Mobile, SBA's largest customer, accounted for 36 percent of quarterly site leasing revenues. Management said U.S. customer activity was slightly below first-half 2026 levels but consistent with expectations. SBA President & CEO Brendan Cavanagh said new leases remain the main activity driver, addressing coverage gaps and capacity needs. MNOs are upgrading sites with C-band and other mid-band spectrum, massive MIMO and higher-capacity radios, while carrier-based fixed wireless access expands. Management sees a robust spectrum pipeline potentially sustaining organic leasing growth well into the next decade: the Upper C-band auction in mid-2027, potential 1.6 GHz and 2.0 GHz auctions, and future 2.7 GHz and 7 GHz auctions. Sprint and EchoStar churn remains a significant headwind to SBA's U.S. leasing revenue. Management expects annual Sprint-related churn of $55-56 million and EchoStar-related churn of $36 million in 2026, with Sprint-related free churn below $20 million in 2027. It expects normalized U.S. churn to stabilize at around one percent after the larger Sprint and DISH effects pass. SBA says it had about 3,000 former DISH Wireless leases on air. After their termination through bankruptcy litigation, the equipment was effectively abandoned and now belongs to SBA. The company acknowledged that interest from other parties could create new leasing opportunities, but such tenants would need new commercial agreements because the DISH leases do not automatically transfer. Continuing its international portfolio review begun in early 2024, SBA agreed in Q3 to sell approximately 1,800 towers in three South American markets, completing its regional exit outside Brazil. The company reported these sites generate about $43 million in annual leasing revenue and over $20 million in annual Adjusted EBITDA. Chile and Ecuador sales have closed; the Peru tower sale is agreed for year-end. SBA has sold, decommissioned or reclassified 1,501 towers year-to-date. These deals follow SBA's exit from the Philippines and Colombia in early 2025, and from Canada last October, Inside Towers reported. Cavanagh says SBA will continue focusing on markets where it can be a leading tower operator aligned with leading mobile network operators. SBA built 210 international towers in Q3, more than double Q2's 99, and a total of 402 since the beginning of the year, primarily in Central America and Africa. Rather than simply exiting international markets, SBA says it is concentrating on select geographic footprints while investing where it sees attractive scale and growth. The company ended the quarter with a total multinational portfolio of 45,252 towers, with 17,342 in the U.S. Management said its SBA Edge initiative is operating several edge-computing sites, with several customers deploying distributed AI inference capacity. Deployments using existing site capacity typically require 200-300 kW, with some sites around 1 MW. Revenue today is minimal, but management sees attractive economics and potential to scale across SBA's U.S. tower portfolio. SBA lowered its 2026 revenue and EBITDA guidance primarily due to foreign exchange and the Chile/Ecuador asset sales but raised AFFO guidance on lower net cash interest expense, lower nondiscretionary capex and share repurchases. By John Celentano, Inside Towers Business Editor

SBA Communications (NASDAQ:SBAC) said third-quarter results met expectations, helped by US leasing, high margins and shareholder returns. It raised the midpoint of its 2026 outlook for adjusted funds from operations (AFFO) by $2 million, and for AFFO per share by $0.08. AFFO per share was $3.19. The company returned about $430 million through dividends and buybacks, including 1.7 million shares repurchased for $300 million. SBA agreed to sell about 1,800 sites in three South American markets, completing its exit from the region outside Brazil. The sites bring in about $43 million in annual leasing revenue. Chief executive officer Brendan Cavanagh pointed to the Federal Communications Commission's upper C-band auction, set to begin in April 2027, as a possible future leasing driver.

SBA Communications (NASDAQ: SBAC) closed at $182.49 on October 9, having returned -17.1% over six months. The Insider Monkey Billionaire Index gained 24.3% and the State Street SPDR S&P 500 ETF Trust 15.1% over the same period. The tower owner's moat is local zoning rules, which make new towers slow to build and protect existing ones. Adding a tenant costs almost nothing, giving SBA an operating margin of 52.16%. Growth is limited, however, because only a few major carriers remain as customers. Revenue rose 2.30% last quarter, and debt of $15.21 billion has pushed book value below zero. The forward multiple of 22.31 sits above the trailing 19.69, suggesting the market expects lower profit next year.