SBA Communications Corporation SBAC posted first-quarter 2026 funds from operations (FFO) per share of $3.01, beating the Zacks Consensus Estimate of $2.86 by 5.24%. The figure compared unfavorably with the FFO per share of $3.16 in the prior-year period. Total revenues rose 5.9% year over year to $703.4 million and came in 0.66% above the consensus mark of $698.8 million.
Results reflected solid site-leasing momentum, led by a sharp rebound in international operations, while the company continued to operate at a company-wide tower cash flow margin of about 80%.
SBAC Posts Higher Leasing Revenue on International Strength
Site-leasing revenue increased 6.5% year over year to $656.1 million, remaining the dominant driver of the company’s quarterly performance. Site development revenues, however, edged down 1.6% to $47.3 million, modestly offsetting the leasing-led growth.
Within site leasing, domestic revenues slipped 2.3% to $450.3 million, while international site-leasing revenues surged 32.6% to $205.8 million. The mix shift underscores how international operations carried overall top-line momentum in the quarter, even as the U.S. market remained comparatively softer.
SBAC Faces Higher Costs
Cost pressures were evident in the core leasing business. The cost of site leasing rose 14.2% year over year to $131.9 million, while selling, general and administrative expense increased 6.5% to $70.5 million.
Those higher costs weighed on profitability metrics. Adjusted EBITDA totaled $475.4 million, up 4% from the year-ago quarter, but the adjusted EBITDA margin slipped to 68.1% from 69.0% a year earlier, highlighting the impact of higher operating expenses.
SBAC Expands Portfolio With Sites and Land
SBA Communications continued investing in its asset base during the quarter. The company acquired 10 communication sites and, notably, purchased rights to land underneath approximately 3,900 communication sites in Guatemala for total cash consideration of $133 million. It also built 80 towers during the first quarter. As of March 31, 2026, the company owned or operated 46,358 communication sites, including 17,378 in the United States and its territories and 28,980 internationally.
The company also spent $10.4 million to purchase land and easements and extend lease terms. Total cash capital expenditures were $191.9 million, including $12.7 million of non-discretionary cash capital expenditures and $179.2 million of discretionary cash capital expenditures tied to new tower builds, tower augmentations, acquisitions and land-related investments.
As of April 29, 2026, SBAC purchased or was under contract to buy 56 communication sites for a total consideration of $36.9 million in cash. It expects to complete the acquisitions by the end of the third quarter of 2026.
SBAC Liquidity & Leverage
Liquidity remained supported by cash generation. Net cash provided by operating activities was $255.1 million in the first quarter compared with $301.2 million in the year-ago period. Total cash, cash equivalents and restricted cash ended the quarter at $332.5 million, providing flexibility to fund ongoing investment needs.
Leverage stayed elevated but within management’s targeted range. SBAC ended the quarter with net debt of $12.6 billion, translating to net debt to annualized adjusted EBITDA of 6.6x, in the middle of its 6.0x to 7.0x range.
SBAC Lifts 2026 Outlook
Given the quarter’s performance, SBAC raised its full-year 2026 outlook across key metrics. The updated forecast indicates site-leasing revenues of $2.649-$2.674 billion and total revenues of $2.839-$2.884 billion, each up $24 million at midpoint from prior guided range. Adjusted EBITDA is now projected at $1.921-$1.941 billion, $9 million up at midpoint.
AFFO per share is expected in the range of $11.93-$12.38, up 9 cents at midpoint from previous guidance range. The Zacks Consensus Estimate is currently pegged at $12.13 per share, which is within the guided range.
SBAC’s Zacks Rank
The company currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
SBA Communications Corporation Price, Consensus and EPS Surprise
SBA Communications Corporation price-consensus-eps-surprise-chart | SBA Communications Corporation Quote
Performance of Other REITs
W. P. Carey Inc. WPC delivered first-quarter 2026 adjusted funds from operations per share of $1.30, topping the Zacks Consensus Estimate by 1.6%. Revenues of $453.02 million also came ahead of the consensus mark of $451.06 million, a 0.4% surprise, and rose 11.2% year over year.
WPC’s results reflected the accretive impact of net investment activity and contractual rent escalations across the net-lease portfolio. Contractual same-store rent registered 2.4% growth year over year on a constant-currency basis.
Digital Realty Trust DLR posted first-quarter 2026 core FFO of $2.04 per share, up 15.3% from $1.77 a year ago. The results beat the Zacks Consensus Estimate of $1.94, delivering a 5.15% earnings surprise.
Total operating revenues were $1.635 billion, up 16.2% from $1.408 billion in the year-ago quarter. Revenues also topped the consensus mark of $1.609 billion by 1.6%, supported by DLR’s strong leasing activity and healthy commencements from a growing backlog.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.
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This article originally published on Zacks Investment Research (zacks.com).