American Tower Corporation (REIT)

Ladies and gentlemen, thank you for standing by. Welcome to the American Tower second quarter 2025 earnings conference call. As a reminder, today's conference call is being recorded. Following the prepared remarks, we will open the call for questions. If you'd like to ask a question, please press star 1-1 on your telephone. You will then hear a message advising your hand is raised. To withdraw your question, simply press star 1-1 again. I would like to turn the call over to your host, Kate Reeb, Senior Director of Investor Relations. Please go ahead.

Good morning, and thank you for joining American Tower's second 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 am joined on the call today by Steve Vondran, our President and CEO of 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. Examples of these statements include our expectations regarding future growth, including our 2025 outlook, capital allocation, and future operating performance, and any other statements regarding 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-K, 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.

Thanks, Kate. Good morning, everyone, and thanks for joining the call. As you can see from our results, 2025 continues to be a good year. Demand for our tower leasing, services, and data center businesses, combined with FX tailwinds, has led us to raise outlook for property revenue, EBITDA, and ASFO. These results highlight the ongoing strength of our global businesses and the durability of mobile network demand that underpins it. And American Tower continues to offer a predictably compelling value proposition for investors against a volatile macroeconomic backdrop. I'll briefly share a few highlights and trends before Rod discusses more detailed results and outlook. Mobile data consumption continues to climb, driving increased demand for network capacity in every region where we operate. We see this demand catalyze activity across our extensive tower footprint and drive network upgrades as the sunsetting of legacy radios faster than we've seen in early G-cycles. Carriers and developed markets continue to expand and mature their 5G networks as they work toward aggressive coverage and quality targets between now and the end of the decade, while emerging market players actively complete their 4G rollouts and selectively yet increasingly pursue the 5G cycle. In our developed tower markets, which consist of the U.S., Canada, and Europe, Mobile traffic growth rates are anticipated to slightly outpace global averages over the next five years. And increasingly data-intensive and uplinked use cases like mobile video, AI, and new devices will continue to stress networks and prompt both mid-band coverage and capacity-driven 5G activity across our tower footprint and rooftop sites. In the U.S., we see the 5G cycle playing out in line with our original expectations, as carriers continue site upgrade activities and work toward 2026 5G coverage goals and begin early densification-oriented co-location activity to improve network quality. We still see significant differences in mid-band rollout progress across our portfolio, positioning us well to capture substantial new business from both amendments and co-locations, with the latter comprising an increasingly material share application mix for certain big three customers. On a combined basis, total application volumes increased more than 50% year-over-year, representing strong, broad-based demand for our sales. Our U.S. services business posted a near-record quarter, propelled mainly by outsourced construction services, signaling our customers' increasing recognition of the quality, efficiency, and overall value that we provide through our best-in-class offerings. Next, our Europe business also continues to trend in line with expectations, benefiting from a healthy overall operating environment and strong customer agreements that provide both growth and insulation from various customer shifts across the region. Mid-bank coverage now stands at just about 55% in the markets where we operate, which is slightly ahead of the continental average and leaves a significant runway for more coverage-oriented activity as carriers pursue 2030 rollout targets. Additionally, spectrum extensions and related coverage obligations in Germany should unlock long-term investment and yield future growth benefits, and in the near term are bringing energy and momentum to 5G rollout activity. In our emerging markets, we've raised our outlook due to a mix of FX tailwinds and core leasing outperforming. Our Africa business continues to post robust growth results, benefiting from a stabilized, lower-churned carrot landscape, better consumer pricing in key markets, and supportive demand dynamics. 5G maturity remains limited in the region, with most activity focused on 4G rollouts and densification, but we do see early 5G deployments continue to progress in select urban areas propelled by use cases of fixed wireless. Activity has improved in markets like Nigeria, where higher consumer prices are supporting better carrier economics and unlocking stronger levels of network investment. Growth in Latin America remains muted relative to historical trends, and our expectations for persisting low single-digit growth through 2027 remain unchanged. However, consolidation is normalized in Brazil, and new activity is anticipated across the more stabilized three-player market as carriers work to fulfill regulator commitments in the region and realize better margins from higher RPs. Our outlook for the region has modestly increased, but along with some improvements in markets like Brazil, we're seeing continued elevated levels of churn as carriers rationalize the infrastructure that's required through consolidation activity. Moving to our data center business, We continue to see exceptional performance from CoreSight and have increased our 2025 expectations to reflect new growth attributable to the recently acquired DE1 facility, as well as elevated demand and pricing from our broader portfolio of interconnection data center facilities. Hybrid and multi-cloud IT architecture requiring secure, low-latency interoperability remains a primary driver of demand. The early phases of AI-related workloads, including inferencing, machine learning models, and GPU as a service, represent a fast-growing component of Foresight's leases. Capacity constraints from high absorption rates and continued AI-driven demand from both very large hyperscale players across the wider market and the enterprise customers that value our interconnection ecosystem are driving a sustained, favorable pricing and pre-leasing environment that we expect to continue into the foreseeable future. These tailwinds have enabled us to remain selective in our customer mix to curate high-quality ecosystems while exceeding our initial underwriting assumptions. We plan to continue to prioritize funding CoreSite on a success basis and in line with our capital allocation strategy to replenish supply and facilitate future growth. Overall, our outlook is generally looking up as we enter the second half of 2025, but we remain focused on delivering our differentiated value proposition and staying true to our stated strategy. Our experienced team is well-versed in addressing certain ebbs and flows across our global footprint, and our strategic long-term focus enables us to benefit from the durability of tower leasing and growing mobile data and computing demand trends. Our superior global portfolio, best-in-class services and customer delivery, high-quality balance sheet, protected contracts, and highly disciplined approach to capital allocation already enable us to extract significant value from the global tower landscape. But we remain motivated to continuously improve and deliver even more compelling returns to our stakeholders. Now I'll hand it over to Rod to discuss second quarter results and our revised 2025 outlook. Rod?