Crown Castle, Inc. Q1 FY2025 earnings call

Dan Schlanger thanks the board, focuses on becoming a pure-play US tower company, progress on separating fiber and small cell businesses, and capital allocation. Sunit Patel mentions fiber segment results are discontinued operations, Q1 had solid start, full year outlook unchanged, and strong liquidity and balance sheet.

Site rental revenues in Q1 had 5.1% tower organic growth excluding Sprint cancellations. There was a $3 million contribution from other billings not expected to recur. Straight-lined revenues were $19 million in Q1 and are expected to turn negative to zero for the full year. Adjusted EBITDA and AFFO in Q1 benefited from lower repair and maintenance costs, sustaining capital expenditures, and other non-costs due to timing and seasonality. The fiber segment results are reported as discontinued operations.

Full year 2025 outlook unchanged: 4.5% organic growth excluding Sprint cancellations, adjusted EBITDA ~$2.8B, AFFO ~$1.8B, free cash flow from discontinued operations ~$250M. Intends to reduce dividend per share to $4.25 in Q2 2025. Expect $150M - $250M annual capital expenditures net of prepaid rent after sale close. Board intends ~$3B share repurchase program. Expect to use ~$6B cash proceeds from sale to repay debt.

Regulatory approvals for the sale of fiber solutions and small cell businesses may take time as they require approvals in multiple states and from the federal government.

Q: What triggered Sunit Patel to move from board role to CFO?

A: Sunit Patel likes the team at Crown, is excited about the tower business and prospects, and sees value in the singular focus on the tower business for automation and system investments.

Q: Where is the process of selling fiber and small cell businesses?

A: Starting filings and conversations with governmental agencies, making progress separating businesses with counterparties Zayo and EQT.

Q: What's the pacing for new lease activity in 2025?

A: Core new leasing activity in Q1 is consistent with 2024, expecting new leasing activity and organic growth in ranges $105M - $115M and ~4.5% respectively, with potential to expand the range if new leasing and churn are better.

Q: What's the mix of colo vs amendment in the business?

A: No significant shift in the mix, there's a continuation of good activity level with both amendments and colocations, and competitive pressure among customers is increasing which is good for tower companies.

Q: What's the Board looking for in a new CEO?

A: Leadership skills to drive the company forward as a tower only company, make it a best-in-class operator, experience in reducing costs, improving customer experience, and managing the capital allocation framework.