SBA Communications Reports Mixed Revenue, Significant Profit Growth in Q3 2024

SBA Communications Corporation reported its financial results for the three and nine months ended September 30, 2024, showing a mixed performance in revenue but significant improvements in profitability. Total revenues for the third quarter were $667.6 million, a slight decrease from $682.5 million in the same period of 2023. For the nine months, revenues totaled $1.986 billion, down from $2.037 billion year-over-year. The decline in revenue was attributed to lower domestic site leasing revenues, primarily due to Sprint lease non-renewals and one-time revenue benefits recognized in the prior year.

Despite the revenue decline, the company achieved substantial growth in operating income, which rose to $375.6 million for the third quarter, compared to $248.6 million in 2023, marking a 53.1% increase. For the nine months, operating income increased to $1.053 billion from $714 million, reflecting a 48.3% rise. Net income for the third quarter surged to $255.9 million, a 106.9% increase from $85.4 million in the prior year. For the nine months, net income rose to $569.9 million from $387.9 million, representing a 78.2% increase.

The company’s strategic decisions have also played a significant role in its financial performance. A key development was the revision of the estimated useful lives of its towers from 15 years to 30 years, effective January 1, 2024. This change is expected to reduce depreciation and amortization expenses by approximately $411.5 million for the year, contributing to the increase in net income. The reduction in depreciation expense for the third quarter was approximately $103 million, translating to an increase of $0.86 per diluted share.

SBA Communications has also been active in acquisitions, spending $268.4 million on tower acquisitions in the nine months ended September 30, 2024, compared to $92.9 million in the same period of 2023. Subsequent to the quarter, the company announced an agreement to purchase over 7,000 communication sites in Central America from Millicom International Cellular S.A. for approximately $975 million, expected to close in 2025.

Financially, the company reported total assets of $10.202 billion as of September 30, 2024, with total liabilities of $12.388 billion, resulting in a shareholders' deficit of $5.175 billion. The company’s long-term debt increased to $12.296 billion from $11.681 billion at the end of 2023. Cash and cash equivalents decreased to $186.3 million from $208.5 million, while total cash, cash equivalents, and restricted cash increased slightly to $251.5 million.

Overall, SBA Communications continues to focus on growth in the wireless industry, driven by future spectrum auctions and the rollout of 5G, while maintaining a strategy of increasing shareholder value through asset investments and dividends.