01—Abstract
Summary
Summary of the 10-Q filed November 1, 2024. Cited figures are marked; the original filing is the authoritative source.
SBA Communications Corporation (SBAC) reported third-quarter 2024 results in its Form 10-Q filed November 1, 2024.
Total revenues were $667.6 milliona for the three months ended September 30, 2024, compared with $682.5 million a year earlier, while net income attributable to SBA Communications Corporation rose to $258.5 million from $87.4 million. The filing attributes much of the earnings improvement to a change in estimated useful lives of towers and certain intangible assets, from 15 years to 30 years effective January 1, 2024, which reduced depreciation, accretion, and amortization by approximately $103.0 million for the quarter and $308.5 million for the nine months. Adjusted EBITDA was $472.6 million for the quarter, versus $482.1 million a year earlier, and the filing notes that Adjusted EBITDA would have been lower on a constant currency basis only slightly, showing the operating base was roughly flat.
The balance sheet remains highly leveraged, with total debt principal of $12.39 billionb and a total shareholders' deficit of $5.17 billion as of September 30, 2024. Cash and cash equivalents were $186.3 million, and operating cash flow for the nine months was $1.02 billion. The company repurchased $200.0 million of stock and paid $318.8 million in dividends during the nine months, and it declared a quarterly dividend of $0.98 per share on October 27, 2024.
Subsequent to quarter end, SBAC agreed to acquire over 7,000 communication sites in Central America from Millicom International Cellular for approximately $975.0 millionc in cash, expected to close sometime in 2025 subject to antitrust approvals, and it issued $2.07 billion of Tower Securities in October 2024 to refinance maturing debt. Site leasing remains the core business, contributing 98.5% of total segment operating profit for the nine months ended September 30, 2024. Domestic site leasing revenue was $464.9 million for the quarter, down slightly from $468.4 million, reflecting Sprint lease non-renewals.
Site development revenue declined to $41.9 milliond from $45.1 million on decreased carrier activity. Management expects 2024 discretionary cash capital expenditures of $490.0 million to $500.0 million.
02—Key points
Key Highlights
- Third-quarter 2024 total revenues were $667.6 million, down from $682.5 million in the third quarter of 2023, while net income attributable to SBA Communications Corporation was $258.5 million versus $87.4 million.
- A change in estimated tower useful lives from 15 to 30 years, effective January 1, 2024, reduced depreciation, accretion, and amortization by $103.0 million in the quarter and $308.5 million for the nine months, boosting reported net income.
- Adjusted EBITDA was $472.6 million for the third quarter of 2024 compared with $482.1 million a year earlier, and $1.41 billion for the nine months.
- Total debt principal was $12.39 billion at September 30, 2024, and the total shareholders' deficit was $5.17 billion.
- The company agreed to buy over 7,000 Central American communication sites from Millicom for approximately $975.0 million in cash, with closing expected in 2025.
- The company repurchased $200.0 million of common stock and paid $318.8 million in dividends during the nine months ended September 30, 2024, and declared a $0.98 per share dividend on October 27, 2024.
- Site leasing generated 98.5% of total segment operating profit for the nine months ended September 30, 2024.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2024, Sba Communications kept $0.39.
- Revenue$667.6M100.0%
- Cost of revenue−$150.3M22.5%
- Gross profit$517.3M77.5%
- Operating costs−$141.7M21.2%
- Operating income$375.6M56.3%
- Interest, other & tax−$117.1M17.5%
- Net income$258.5M38.7%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2024filed November 1, 2024Financial Statements
Q3 FY2024 against Q3 FY2023
| Line item | Q3 FY2024Q3 FY2023 | Change |
|---|---|---|
| Revenue | $667.60M$682.54M | −2.2% |
| Cost of Revenue | $150.34M$149.77M | +0.4% |
| Gross Profit | $517.26M$532.77M | −2.9% |
| SG&A Expenses | $60.09M$64.82M | −7.3% |
| Operating Expenses | $292.00M$433.94M | −32.7% |
| Operating Income | $375.60M$248.60M | +51.1% |
| Net Income | $258.53M$87.42M | +195.7% |
| EPS (Basic) | $2.41$0.81 | +197.5% |
| EPS (Diluted) | $2.40$0.80 | +200.0% |
| Shares Outstanding (Basic) | 107.49M108.37M | −0.8% |
| Shares Outstanding (Diluted) | 107.92M108.89M | −0.9% |
05—Questions
Frequently Asked Questions
Why did reported net income rise so sharply in the third quarter of 2024?
Net income was $255.9 million for the quarter versus $85.4 million a year earlier. The filing attributes a large part of the improvement to a change in estimated useful lives of towers and certain intangible assets from 15 years to 30 years, which reduced depreciation, accretion, and amortization by approximately $103.0 million for the quarter. The filing also notes lower asset impairment costs and lower interest expense, partly offset by higher income tax provisions.
How much debt does SBA Communications carry, and when does it mature?
Total debt principal was $12.39 billion as of September 30, 2024. The largest maturities in the filing are the 2024 Term Loan, with $2.29 billion due January 25, 2031, and the 2020 and 2021 Senior Notes, totaling $1.5 billion each, due in 2027 and 2029. The 2014-2C Tower Securities of $620.0 million were repaid on October 11, 2024 using proceeds from the new 2024 Tower Securities.
What is the Millicom transaction?
After September 30, 2024, the company agreed to purchase over 7,000 communication sites in Guatemala, Honduras, Panama, El Salvador, and Nicaragua from Millicom International Cellular S.A. for approximately $975.0 million in cash. Millicom will lease back space on the acquired sites under 15-year Master Lease Agreements, and the transaction is expected to close in 2025, subject to antitrust approvals and other conditions.
Is the dividend being maintained?
Yes. The company paid $0.98 per share quarterly dividends in each quarter of 2024 and declared another $0.98 per share on October 27, 2024, payable December 12, 2024. The filing states that future dividends are at the discretion of the Board of Directors.
What is the company's outlook for capital spending?
For 2024, the company expects non-discretionary cash capital expenditures for tower maintenance and general corporate purposes of $51.0 million to $57.0 million, and discretionary cash capital expenditures of $490.0 million to $500.0 million. It expects to fund these from cash on hand, operating cash flow, and Revolving Credit Facility borrowings or new financings.
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