SBA Communications Corporation SBAC reported second-quarter 2026 funds from operations (FFO) per share of $3.03, surpassing the Zacks Consensus Estimate of $2.96 by 2.36%. However, the figure declined 3.8% from $3.15 in the year-ago quarter.
Total revenues increased 2.3% year over year to $715.3 million and beat the consensus mark of $703.4 million by 1.69%. Strong international site-leasing growth supported the top line, though domestic weakness and higher costs pressured profitability.
SBAC Gains From International Leasing
Site-leasing revenues advanced 5.1% year over year to $663.9 million. Excluding foreign-currency movements, growth was 3%. Site leasing contributed 98.2% of the company’s total operating profit, highlighting the importance of recurring tower rental revenues.
International site-leasing revenues surged 30.5% to $211.4 million. Excluding foreign-currency movements, growth was 22.4%. International site-leasing segment operating profit (SOP) climbed 31.9% to $148.8 million, while tower cash flow increased 28% to $147.4 million.
SBAC Sees Domestic Pressure
Domestic site-leasing revenues declined 3.7% year over year to $452.5 million. Domestic cash site-leasing revenues also fell 3.7% to $450.2 million as customer consolidation-related churn continued to weigh on results.
Domestic site leasing SOP decreased 4.8% to $381 million. Domestic site leasing tower cash flow fell 4.7% to $377.5 million, while the related margin narrowed to 83.8% from 84.7% in the prior-year quarter.
SBAC Faces Cost and Margin Strains
The cost of site leasing increased 13.1% year over year to $134.1 million. Selling, general and administrative expenses rose 9.2% to $77.5 million, reflecting additional pressure on operating efficiency. Net cash interest expense rose 9.5% to $122.1 million.
Adjusted EBITDA increased 1.8% year over year to $483.8 million, but was unchanged excluding foreign currency impact. The adjusted EBITDA margin edged down to 68% from 68.1%. The tower cash flow margin contracted to 79.5% from 81% a year earlier.
SBAC Expands Tower Footprint
The company acquired six communication sites for $10.5 million and built 109 towers during the second quarter. Of the newly constructed towers, 99 were international sites.
SBA Communications ended June with 46,390 communication sites, including 17,362 in the United States and its territories and 29,028 internationally. Total cash capital expenditures were $91.2 million, comprising $15.8 million of non-discretionary spending and $75.4 million of discretionary investments.
SBAC Strengthens Liquidity and Capital Structure
Net cash provided by operating activities totaled $407.2 million, up from $368.1 million in the year-ago quarter. The company ended the period with $12.8 billion of total debt, $12.4 billion of net debt and $400 million of cash and cash equivalents, short-term restricted cash and short-term investments.
Net debt to annualized adjusted EBITDA was 6.4 times, within management’s target range of 6-7 times.
SBAC Updates 2026 Outlook
Management raised the midpoint of its total revenue outlook by $2 million. Total revenues are now projected between $2.841 billion and $2.886 billion, while site-leasing revenues are expected in the range of $2.651-$2.676 billion. Adjusted EBITDA is forecasted between $1.92 billion and $1.94 billion, reflecting a $1 million reduction at the midpoint.
The 2026 AFFO-per-share outlook was increased 2 cents at the midpoint to $11.95-$12.40. The Zacks Consensus Estimate for the metric is currently pegged at $12.20 per share, which is within the guided range.
SBAC’s Zacks Rank
The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Office REITs
Cousins Properties Inc. CUZ reported second-quarter 2026 FFO of 75 cents per share, beating the Zacks Consensus Estimate of 74 cents. The metric rose 7.1% from the year-ago quarter.
Rental property revenues increased 11.8% year over year to $265.7 million and surpassed the consensus mark of $263.6 million. The results reflected strong leasing momentum, higher rental revenues and solid same-property NOI growth.
BXP, Inc. BXP reported second-quarter 2026 FFO of $1.78 per share, beating the Zacks Consensus Estimate of $1.71. FFO rose 4.1% from the year-ago period.
Lease revenues increased 3.2% year over year to $831.68 million and surpassed the consensus mark of $812.49 million. Results reflected higher occupancy and same-property NOI growth, which supported the FFO beat.
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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Cousins Properties Incorporated (CUZ): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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