American Tower Q3 2026: EPS fell 9.9% on paper losses, AFFO per share rose 3.2% as U.S. leasing stalled

American Tower reported third-quarter 2026 results on October 27, 2026. Diluted earnings per share fell 9.9% to $1.64 and net income attributable to common stockholders fell 10.3% to $765.8 million. The decline came from below the operating line: operating income rose 2.9% to $1,269.0 million, and AFFO per share, the cash measure REITs pay distributions from, rose 3.2% to $2.87. Underneath both, leasing on U.S. towers stopped growing: organic tenant billings growth in U.S. & Canada was 0.0%.

The source is the earnings release (Exhibit 99.1 to the 8-K filed October 27, 2026). The full Form 10-Q isn't filed yet, so this analysis has no MD&A commentary on why individual segments moved and no breakdown of the currency effects by country; it uses the release's financial statements, segment tables and revenue-component bridges.

A note on vocabulary. AFFO (adjusted funds from operations) is what REITs report alongside net income. It adds back real-estate depreciation (a large non-cash charge: $519.4 million this quarter), strips out non-cash rent accounting and one-off items, and subtracts maintenance capital spending, so it approximates the cash available for distributions. Tenant billings are the rent the company actually bills tenants; organic growth counts only sites owned for at least a year, at constant currency.

The quarter in figures

Operating margin here is operating income divided by total revenue: the share of revenue left after running the towers and data centers and charging depreciation, before interest and tax.

Why EPS fell while the business grew

Net income attributable to common fell $87.5 million. Three items explain more than all of it:

• Mark-to-market on equity investments. The release footnotes an unrealized loss on equity investments of about $71.5 million this quarter against an unrealized gain of about $10.9 million a year ago, an $82.4 million swing. "Other (expense) income" went from +$27.7 million to −$52.2 million, even though currency translation was a small gain in both years ($27.0 million vs $18.0 million). These are changes in the market value of shares the company holds; no cash moved.
• Straight-line rent reversal. GAAP spreads rent on leases with built-in increases evenly across the lease term, which books more revenue than is billed early on and less later. Straight-line revenue was −$24.0 million this quarter against +$27.7 million a year ago, a $51.7 million drag on revenue with no effect on cash. Net of straight-line expense, the swing was $50.0 million (−$31.7 million vs +$18.3 million).
• A higher tax rate. The income tax provision rose to $117.6 million from $37.4 million; the effective rate went to 13.1% from 3.9%. The AFFO reconciliation shows $53.4 million of this quarter's tax was deferred or other non-cash tax adjustments (−$2.7 million a year ago); cash taxes paid were $64.2 million vs $40.1 million.

Working the other way, net income attributable to noncontrolling interests (the outside partners' share of the European and U.S. data center businesses) fell to $15.0 million from $59.3 million, which added $44.3 million to the common stockholders' line. The release doesn't explain the drop.

Strip out other income and expense entirely and pre-tax income was $950.6 million against $922.3 million, up 3.1%, in line with operating income (+2.9%) and AFFO per share (+3.2%). That is the business's actual growth rate this quarter.

Takeaway: The 9.9% EPS decline is mostly a mark-to-market loss and an accounting reversal, not lost rent; AFFO per share grew 3.2%. But the real news is in the tower bridge: U.S. organic leasing growth hit zero as cancellations more than doubled and new leasing slowed, and services revenue, the earliest sign of carrier activity, halved. American Tower's growth this year is coming from data centers and buybacks, not from its largest segment.

U.S. towers: growth stopped

U.S. & Canada property revenue fell 3.3% to $1,275 million. Tenant billings, the rent actually billed, were flat at $1,276 million vs $1,275 million. The release's revenue bridge for the segment (at constant currency):

Contractual escalators are doing their job. What changed is the other two lines: cancellations more than doubled and new leasing fell 39%. Our Q2 report traced the cancellations to DISH Wireless, which American Tower said was about 4% of U.S. & Canada property revenue in 2025, and which filed for Chapter 11 on June 30, 2026 after the company terminated its contract. The earnings release does not mention DISH by name, so the share of this quarter's $63 million attributable to it will only be confirmed by the 10-Q. The slowdown in colocations is a separate, demand-side signal: U.S. new leasing was $33.8 million in Q2 per that report and $25 million now.

The segment's revenue line is also carrying the straight-line reversal: −$30 million of straight-line revenue this quarter vs +$17 million a year ago. That $47 million swing is larger than the whole $44 million decline in segment revenue. Segment operating profit fell to $1,010 million from $1,060 million and the margin to 79% from 80%.

Services, the site development and permitting work American Tower does for carriers, fell 49.2% to $51.4 million, and its gross margin fell to $19 million from $47 million. Services is small, but carriers pay for zoning and structural work before they install equipment, so it tends to lead colocation revenue.

Outside the U.S.: headline growth outruns the rent

• Latin America grew revenue $43 million while organic tenant billings fell 2.1%: cancellations were $24 million against $12 million a year ago. The growth came from currency (a $24 million boost to tenant billings and $9 million to other revenue), pass-through revenue ($123 million vs $117 million) and "other revenue" of $17 million vs $4 million, which the release doesn't break down. The 10-Q should say what that is; until then, the margin jump to 66% from 61% shouldn't be read as better leasing.
• Africa & APAC is the healthiest tower segment at +8.2% organic, but slowing (10.6% in Q2, 13.5% a year ago). Pass-through revenue, power and fuel costs billed back to tenants at cost, rose to $135 million from $93 million. That adds revenue without adding profit, which is why the margin fell to 60% from 64%.
• Europe is steady: +4.2% organic, with pre-paid amortization revenue (tenant contributions to site upgrades, spread over the lease) up to $20 million from $8 million.

Data centers carry the growth

Data Centers revenue rose 17.4% to $313 million and segment operating profit 17.9% to $165 million, at a steady 53% margin (lower than towers because electricity is a real cost here). The release puts cash revenue growth at 16.3%. Management raised the segment's full-year range to $1,218–1,228 million, 16.1% growth at the midpoint, from $1,200–1,220 million in July. The capital plan keeps $695 million of data center development spending inside $1,035–1,065 million of discretionary capital, so a segment producing 11% of property revenue still gets about two-thirds of the growth budget.

What the headline numbers hide

• Cash conversion is normal for a REIT. Operating cash flow was $1,392.8 million in the quarter (derived from year-to-date figures) against net income of $780.8 million; the gap is mostly depreciation. Year to date, operating cash flow rose 6.0% to $4,280.2 million. Free cash flow (operating cash flow less capital spending) was $986 million, up 0.2%.
• GAAP vs adjusted. The release's main adjusted measures are Adjusted EBITDA (+0.9%) and AFFO per share (+3.2%). Adjusted EBITDA is held down by the straight-line reversal: excluding the net straight-line amounts in both years, it would have been about $1,863.5 million vs $1,797.2 million, up 3.7%. AFFO excludes the equity-investment losses and the straight-line swing, which is why it grew while EPS fell.
• Buybacks did part of the per-share work. The company repurchased about 1.8 million shares for about $315 million in Q3 (the cash flow statement shows $300.1 million paid in the quarter), and the board added a $2.0 billion authorization on October 23. Distributions paid to common stockholders were $834.3 million in the quarter (derived from year-to-date cash flows). Diluted shares fell 0.7%, which explains why AFFO per share grew 3.2% while AFFO in dollars grew 2.4%.
• Interest costs are rising. Interest expense rose 5.5% to $366.1 million and cash interest expense 5.8% to $353.1 million; cash paid for interest is up 10.4% year to date ($1,220.5 million). In September the company repaid $600 million of 1.450% notes and issued $1.6 billion of new notes due 2031–2036; it repaid another $1.0 billion of 3.375% notes on October 14. The current portion of long-term debt is $5,363.5 million, up from $3,387.8 million at year-end, so more low-coupon debt will be refinanced at today's rates.
• Receivables are not a concern. Accounts receivable fell to $622.2 million from $650.3 million at year-end while revenue grew.

On balance the quarter's reported earnings are understated: an $82.4 million swing to unrealized equity losses, a $51.7 million non-cash straight-line reversal and a higher tax rate pushed EPS down 9.9% while operating income grew 2.9% and AFFO per share 3.2%. That verdict is about the accounting, not the leasing: U.S. organic growth at zero is a real weakness.

Guidance: revenue up, AFFO flat, per-share up two cents

Management raised its full-year 2026 outlook for the third time this year, but only at the top line:

The release attributes the $55 million property revenue raise to data center outperformance, but the Data Centers range itself rose only $13 million at the midpoint; the rest isn't broken down in the release (currency details are in a supplemental package that isn't part of the filing). The Adjusted EBITDA and AFFO midpoints are unchanged, net income was cut $30 million "primarily due to unrealized losses for equity securities," and the $0.02 increase in AFFO per share is attributed to "capital allocation decisions," i.e. the buybacks. Organic tenant billings growth is still guided to about 1% for the year, with U.S. & Canada at about 0.5% and Latin America at about −3%.

The company also agreed to sell its Canadian subsidiaries for about C$288 million (about $202 million), expected to close in Q4.

Did last time's read hold up?

Our Q2 report named three things to watch. Services as the leading indicator: it said a 38% decline in carrier site work was "not consistent with an imminent reacceleration in U.S. colocations." That held, and got worse: services fell 49% and U.S. colocation and amendment revenue fell again. Rising interest costs: held; cash interest is still growing faster than AFFO. Distribution growth outrunning AFFO growth: held; the $1.79 quarterly distribution is up 5.3% while AFFO per share is up 3.2%, though the payout is still a comfortable 62% of this quarter's AFFO per share. Data centers did better than the Q2 read expected, at 17.4% growth vs the roughly 15% it assumed.

Outlook

Our read: the trough in U.S. tower leasing is deeper than the full-year guide made it look in July. DISH churn should stop depressing the comparison from early 2027, once a full year of it is in the base, but the drop in new colocations and in services work points to carriers spending less on sites, which wouldn't lap out on its own. Until that turns, AFFO per share growth around 3% rests on data centers growing in the mid-teens and on buybacks, now backed by a fresh $2.0 billion authorization, while refinancing low-coupon debt at higher rates keeps pushing interest costs up. What to watch in Q4: whether U.S. colocations stop falling, whether services revenue stabilizes, and what the 10-Q says drove Latin America's "other revenue" and the drop in the noncontrolling interests' share of profit.