- Company name
- SBA Communications
- Sector
- Cell tower REIT
- About
- SBA Communications owns and leases wireless towers and other sites, such as rooftops and small cells. At September 30, 2026, it owned or operated 45,252 sites: 17,340 in the United States and its territories and 27,912 in other countries, mostly in Latin America and Africa. Mobile network operators rent space on the towers for their antennas under long leases with yearly rent increases. More tenants on a tower add revenue at little extra cost, so site leasing gives about 98% of operating profit. SBA also builds towers and does site development work for carriers. It is a real estate investment trust, and it pays a quarterly dividend. For 2026, it expects site leasing revenue of $2,643 million to $2,658 million.
- Thesis
- The market prices SBA for slow US growth and high debt costs. US site leasing revenue fell 3.4% in Q3 2026 from a year earlier, because Sprint and EchoStar ended leases. SBA expects $133 million to $136 million of US churn in 2026. Net debt was 6.4 times annualized adjusted EBITDA at September 30, 2026, so higher interest rates raise its costs and lower the price investors pay for steady rent. Investors also ask if satellite phone service, such as SpaceX's Starlink Mobile, will reduce the need for towers. For the gap to close, three things must be true. US leasing revenue must grow again in 2027, after the Sprint and EchoStar churn ends, from new leases and amendments as carriers use new spectrum such as the spectrum of FCC Auction 115 and the upper C-band auction. AFFO per share must reach the 2026 guidance of $12.15 to $12.37, which SBA raised in November 2026, and then grow. SBA must refinance the debt due in 2026 and 2027 at rates near the 5.1% of its July 2026 bonds while it keeps its BBB rating. The SpaceX purchase of 800 MHz spectrum in October 2026, with a plan for a ground network, can also make SpaceX a new tenant. The Q3 2026 report on November 2, 2026, kept US churn inside the plan. In November 2026, SBA funded the repayment of the 2021-1C Tower Securities with a floating-rate term loan. The next tests are the repayment of the $1.5 billion 2020 Senior Notes due February 15, 2027, and the 2027 outlook with the Q4 report in about February 2027. The gap can close slowly, over 2027 and 2028, as churn ends and new carrier work starts.
- Risks
- US churn is high. Sprint and EchoStar leases end, and SBA expects $133 million to $136 million of US churn in 2026. US site leasing revenue fell 3.4% in Q3 2026. If carriers spend less on their networks, US growth stays weak after 2026.
Debt is high at 6.4 times annualized adjusted EBITDA. About $3.56 billion of debt was current at September 30, 2026, including the $1,165 million 2021-1C Tower Securities with an anticipated repayment date of November 9, 2026 and the $1.5 billion 2020 Senior Notes due February 15, 2027. Higher interest rates raise the cost of new debt and lower the value of tower rent.
Satellite phone services, such as SpaceX's Starlink Mobile, can reduce the need for towers in rural areas. SpaceX can also become a tower tenant if it builds a ground network.
About a third of site leasing revenue comes from outside the US, mostly in Latin America and Africa. Weak currencies lower this revenue in dollars, and the wireline churn of Oi in Brazil adds to international churn.
A merger of wireless carriers, or the exit of a carrier, can end many leases at once, as the Sprint and EchoStar churn shows.
- Balance sheet
- Cash: $455M
Debt: $13.0B
Net debt: $12.5B
EBITDA, last 12 months: $2.0B
Net debt / EBITDA: 6.4× (high)
Interest cover: 2.8×
Undrawn credit line: $2.5B, to July 2031
Debt due within 12 months: $3.6B
Ratings: S&P BBB
SBA funds itself mostly with secured tower securities of its subsidiaries and unsecured senior notes of the parent. At September 30, 2026, total debt was $12.98 billion: $6.48 billion of secured tower securities and $6.5 billion of unsecured senior notes. Cash, short-term restricted cash and short-term investments were $455 million. Net debt was 6.4 times annualized Q3 2026 adjusted EBITDA, in the middle of the target range of 6.0 to 7.0 times, and net secured debt was 3.1 times. EBITDA is Q3 2026 adjusted EBITDA times four. Interest cover is operating income divided by interest expense for the first nine months of 2026. Current debt was $3.56 billion and included the $1,165 million 2021-1C Tower Securities with an anticipated repayment date of November 9, 2026 and the $1.5 billion 2020 Senior Notes due February 15, 2027. SBA's outlook assumes that it refinances the 2021-1C Tower Securities in Q4 2026 at 5.25%. The $2.5 billion unsecured revolving credit facility, due July 23, 2031, and the $2.5 billion commercial paper program that it backs had nothing drawn on November 2, 2026. In Q3 2026, SBA bought back $300 million of its shares and paid $131.3 million of dividends, and $0.8 billion of buyback authority remained on November 2, 2026. The rating is S&P's upgrade to BBB, reported on August 3, 2026.
As of Sep 30, 2026.
- Checkpoints
- Nov 2, 2026: Q3 2026 results: US leasing and churn. Passed. Watch: US churn within the guided $132 million to $136 million and AFFO per share guidance kept or raised pass; more churn or a lower outlook fails. Outcome: US churn for 2026 stayed inside the range at $133 million to $136 million, and SBA raised the midpoint of its AFFO per share outlook by $0.08 to $12.15 to $12.37.
Nov 9, 2026: Refinancing of the 2021-1C Tower Securities. Passed. Watch: Repayment or refinancing of the $1,165 million 2021-1C Tower Securities by the anticipated repayment date at a fixed rate near the 5.25% that SBA assumed passes; a much higher rate fails. Outcome: SBA funded the full $1,165 million repayment with a new unsecured term loan at term SOFR plus 0.750% to 1.375%, a floating rate and not a fixed one, but not a much higher rate than the 5.25% it assumed.
Feb 2, 2027 (estimate): FY 2026 results and 2027 outlook. Pending. Watch: A 2027 outlook with US site leasing revenue that grows again and higher AFFO per share passes; a further fall in US leasing revenue fails.
Feb 15, 2027: Repayment of the 2020 Senior Notes. Pending. Watch: Repayment or refinancing of the $1.5 billion 2020 Senior Notes by February 15, 2027, at a rate near SBA's recent borrowing costs, with the BBB rating kept, passes; a much higher rate or a rating cut fails.
- Recent events
- Nov 6, 2026: SBA signed a $2.0 billion senior unsecured term loan that matures on November 6, 2029. It borrowed $1.165 billion on November 6, 2026, and it can borrow the other $835.0 million until May 6, 2027. The loans pay interest at term SOFR plus 0.750% to 1.375%, based on SBA's credit ratings. SBA plans to use the first $1.165 billion to repay all of the 2021-1C Tower Securities.
Nov 2, 2026: SBA reported Q3 2026 results. Site leasing revenue rose 1.4% to $665.4 million, with international revenue up 13.3% and US revenue down 3.4%. AFFO per share fell 3.3% to $3.19. SBA raised its 2026 AFFO per share outlook to $12.15 to $12.37 from $11.95 to $12.40, a rise of $0.08 at the midpoint. Its revenue bridge now shows $133 million to $136 million of US churn in 2026. It bought back 1.7 million shares for $300 million in the quarter and declared a dividend of $1.25 per share.
Oct 9, 2026: Tower stocks rose after SpaceX agreed to buy Grain Management's 800 MHz spectrum and said that it will pair Starlink Mobile with a ground network. SBA shares rose about 6% that morning.
Sep 25, 2026: SBA set up a commercial paper program of up to $2.5 billion of short-term unsecured notes, backed by its unsecured revolving credit facility.
Sep 10, 2026: SBA sold all its towers in Chile and Ecuador and agreed to sell all its towers in Peru. The Peru sale needs regulatory approval and should close in Q4 2026. The Chile and Ecuador sale lowers 2026 site leasing revenue by about $10 million.
Aug 3, 2026: SBA reported Q2 2026 results. Site leasing revenue rose 5.1% to $663.9 million, with international revenue up 30.5% and US revenue down 3.7% from Sprint, EchoStar and other lease non-renewals. AFFO per share fell 3.8% to $3.05. S&P raised SBA's rating to BBB. SBA declared a dividend of $1.25 per share.
Jul 23, 2026: SBA closed its first investment-grade bond offering, $3.5 billion of unsecured notes due 2030, 2031 and 2033 at a blended rate of 5.113%. It repaid its $2.2 billion term loan and its $1.0 billion revolving credit borrowings, and it signed a new $2.5 billion unsecured revolving credit facility due July 2031.
Apr 29, 2026: SBA reported Q1 2026 results and its updated outlook for 2026.