SBA's Q2 2026 AFFO per share fell 3.8% to $3.05 as Sprint and EchoStar churn cut US leasing revenue 3.7% and interest and withholding-tax costs rose, while Millicom towers lifted international leasing revenue 30.5%; full-year AFFO/share guidance was nudged up to $11.95–$12.40.
Revenue
$715M
+2.3% YoY
Net income
$199M
-12.0% YoY
Diluted EPS
$1.87
-10.5% YoY
Operating margin
49.2%
Overview
SBA Communications earns most of its money renting space on cell towers to wireless carriers. In the second quarter of 2026 (April–June) that business split in two. US leasing revenue fell 3.7% because carriers are cancelling leases they no longer need: the MD&A attributes the drop to "Sprint, EchoStar, and other lease non-renewals." International leasing revenue rose 30.5%, mainly from the 6,789 Central American towers bought from Millicom. Total revenue grew 2.3% to $715.3 million.
Per-share cash earnings still fell. AFFO per share, the figure SBA and its peers lead with, dropped 3.8% to $3.05. Higher interest costs and higher cash taxes more than offset the small gain in tower profit.
AFFO, briefly.Adjusted funds from operations estimates the cash a tower owner has left to pay dividends and invest after interest, cash taxes and routine maintenance spending. Towers are valued on this measure rather than on GAAP net income because GAAP deducts large depreciation charges on steel structures that mostly keep their value and earning power. For tower companies, AFFO per share is closer to "what the business really earned per share" than EPS is.
Key figures
Metric
Q2 2026
Q2 2025
YoY Change
Total revenue
$715.3M
$699.0M
+2.3%
Site leasing revenue
$663.9M
$631.8M
+5.1% (+3.0% ex-FX)
– Domestic site leasing revenue
$452.5M
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Tower cash flow is leasing revenue minus the direct cost of running the sites (mostly ground rent), in cash terms. It shows how profitable the towers themselves are before corporate overhead and financing. "Ex-FX" removes the effect of exchange-rate moves, as calculated by the company.
US: churn outpacing organic growth
The domestic business is where the pressure is. The MD&A says domestic leasing revenue fell $17.4 million "primarily due to Sprint, EchoStar, and other lease non-renewals." The drop was only partly offset by contractual rent escalators, new leases and amendments, and revenue from 27 towers acquired and 39 built since April 2025. Domestic segment operating profit fell $19.4 million (−4.8%) for the same reason.
The company's own 2026 revenue bridge shows the size of the problem. For the full year SBA expects:
Domestic 2026 bridge item
Amount
New leases and amendments
+$33M to +$37M
Contractual escalations
+$51M to +$52M
Sprint consolidation churn
−$55M to −$56M
EchoStar churn
−$56M
Regular churn
−$21M to −$24M
2026 domestic site leasing revenue
$1,813M–$1,827M vs. $1,866M in 2025
Churn is revenue lost when tenants cancel or fail to renew leases. The 10-Q puts expected domestic churn at $132–136 million of cash leasing revenue this year. That is more than the $84–89 million that escalators and new business are expected to add. Two events drive it: T-Mobile shutting down the duplicate Sprint network it inherited, and EchoStar's leases coming off. Both are specific, time-limited effects rather than signs of weak carrier demand. CEO Brendan Cavanagh described carrier activity as "steady." Still, US tower revenue will shrink in 2026 before those effects wear off.
The weaker US activity also reached the services arm. Site development revenue (installation and project work for carriers, US only) fell $15.8 million "as a result of decreased carrier activity."
International leasing revenue rose $49.5 million, or $36.3 million at constant currency. The MD&A credits this mainly to revenue from 6,791 towers acquired (6,789 of them from Millicom) and 559 towers built since April 2025. Organic escalators and new leases added to that, partly offset by non-renewals and divestitures. Brazil alone made up 14.5% of total site leasing revenue. International sites now outnumber US sites by 29,028 to 17,362.
The mix shift is why the overall tower cash flow margin fell from 81.0% to 79.5%. International towers run at a 70.0% margin versus 83.8% domestically, so as they grow into a larger share of the business, the blended margin falls. The international margin itself was almost unchanged (70.3% a year earlier).
Why GAAP profit fell more than the business did
Net income attributable to SBA fell 12.0% while operating income rose 5.1%. Most of the gap is accounting noise from currency moves. SBA records a gain or loss when it revalues intercompany loans to foreign subsidiaries. That gain was $8.0 million after tax this quarter against $30.4 million a year earlier, a $22 million swing that has nothing to do with renting towers. Excluding FX, the company reports net income down 5.2% instead of 12.9% (on a total basis before noncontrolling interests).
Lower impairment charges helped operating income: asset impairment and decommission costs fell to $22.6 million from $45.2 million, because the quarterly impairment review required a smaller write-down. Depreciation rose $11.4 million with the larger tower base.
Why AFFO fell
Adjusted EBITDA rose $8.3 million, yet AFFO fell $17.7 million. Based on the reconciliation tables, the difference comes from three items:
Interest. Net cash interest rose $10.6 million (+9.5%). The MD&A attributes this to more debt at a higher average rate, "primarily due to the impact from the repayment of the 2020-1C Tower Securities on January 9, 2026 using borrowings from the Revolving Credit Facility which accrued interest at a higher rate."
Cash taxes. At constant currency the tax provision rose $12.1 million, "primarily due to an increase in withholding taxes." The non-cash part of the tax charge that AFFO adds back fell from $27.2 million to $14.8 million, so more of the tax bill was paid in cash. Our reading of the reconciliation puts the increase in cash taxes and similar items at about $13 million year over year.
Maintenance capex. Non-discretionary capital spending rose to $15.8 million from $13.8 million.
Favorable currency moves added 2.2 percentage points to AFFO per share. Without it, AFFO per share would have fallen 6.0%. Share buybacks helped a little: the diluted share count fell to 106.3 million from 107.8 million.
Takeaway: SBA's AFFO per share is falling this year (−3.8% in Q2, −6.0% excluding currency) because two one-time US churn events (Sprint decommissioning and EchoStar) plus higher interest and withholding-tax costs outweigh growth from the Millicom towers. The company's own bridge puts 2026 domestic leasing revenue below 2025, so the key question for 2027 is whether US revenue returns to growth once Sprint and EchoStar churn has run through.
Balance sheet and refinancing
After the quarter ended, SBA moved to an investment-grade balance sheet. On July 23, 2026 it issued $3.5 billion of unsecured senior notes, maturing 2030, 2031 and 2033, at a blended 5.113% rate. It used the proceeds to repay the $1.0 billion revolver balance and the $2.2 billion 2024 Term Loan. It also replaced its secured revolver with a $2.5 billion unsecured facility priced at Term SOFR + 100 bps at current ratings, and S&P upgraded the company to BBB. At quarter end, total debt was $12.8 billion and net debt was 6.4x annualized Adjusted EBITDA, in the middle of the 6.0x–7.0x target range. The next maturity is the $1,165 million 2021-1C Tower Securities (anticipated repayment date November 9, 2026), which the outlook assumes will be refinanced at 5.25%.
The board declared a $1.25 quarterly dividend, payable September 17. That is about 41% of this quarter's $3.05 AFFO per share, which leaves room for tower builds and buybacks. $1.1 billion remains under the repurchase authorization.
Outlook
Management raised its full-year 2026 guidance slightly (changes measured at range midpoints versus the April 29 outlook):
2026 Outlook
Range
Change vs. April
Site leasing revenue
$2,651M–$2,676M
+$2M
Total revenue
$2,841M–$2,886M
+$2M
Adjusted EBITDA
$1,920M–$1,940M
−$1M
AFFO
$1,270M–$1,318M
+$1M
AFFO per share
$11.95–$12.40
+$0.02
Discretionary capex
$455M–$475M
+$25M
The outlook assumes 106.3 million diluted shares and no further buybacks. It uses exchange rates of 5.10 Brazilian reais, 2,560 Tanzanian shillings and 16.40 South African rand per US dollar for the second half.
Our view: This guidance confirms 2026 as a trough year rather than a deterioration. About $111–112 million of the domestic churn comes from Sprint and EchoStar, which are defined, finite events, and the underlying organic engine (escalators plus new leases) is still adding $84–89 million a year in the US. The two things to watch are:
Whether domestic new-lease activity picks up with the spectrum auction (Auction 115) that management mentioned.
Whether the lower rates on the new unsecured investment-grade debt cut interest costs enough to reverse this year's rise in interest expense.
The $25 million increase in discretionary capex supports management's plan for more tower building, especially Central American builds for Millicom. It lifts future international revenue, but international towers earn a structurally lower margin than US ones. The main risk is currency: roughly a third of leasing revenue is now international, so a stronger dollar could erase the FX tailwind that flattered this quarter's reported figures.
Source: SBA Communications Form 10-Q for the quarter ended June 30, 2026 (filed August 6, 2026) and the Q2 2026 earnings release (Form 8-K Exhibit 99.1, August 3, 2026).