Financial Trends -- 4/10
The fiber/small-cell segment was sold (closed 2026-05-01) and reclassified to discontinued operations beginning 1Q2025. Three consequences govern every number on this page:
- Income-statement series carry two vintages for 2024. The as-originally-reported consolidated figures (24Q3 net revenues $1,652M) are not comparable to 2025+; the restated continuing-operations (tower-only) vintage (24Q3 net revenues $1,120M) is. Only the restated vintage is used here.
- Restated tower-only quarterlies exist only back to 2024Q3. 1H2024 exists at the full-year level only: FY2024 continuing-ops net revenues $4,460M less restated 3Q $1,120M and 4Q $1,119M implies 1H24 = $2,221M; 1H25 actual $2,121M, so -4.5% YoY. Individual 1Q24/2Q24 splits are shown as n/a rather than estimated.
- The consolidated cash-flow statement was NOT restated. FY2025 operating cash flow of $3,057M still includes fiber while the capex line of $182M is continuing-ops only. Any 2026-vs-2025 CFO-less-capex comparison is contaminated; AFFO is the clean continuing-ops cash proxy and is the primary FCF measure for this REIT.
| Metric ($M) | 24Q3 | 24Q4 | 25Q1 | 25Q2 | 25Q3 | 25Q4 | 26Q1 | 26Q2 | YoY |
|---|---|---|---|---|---|---|---|---|---|
| Towers (units) | 40,000 | 40,000 | 40,000 | 40,000 | 40,000 | 40,000 | 40,000 | 40,000 | Flat |
| LQA site rental / tower ($K) | 106.6 | 107.0 | 101.1 | 100.8 | 101.2 | 101.9 | 96.1 | 96.7 | -4.1% |
| Net revenues | 1,120 | 1,119 | 1,061 | 1,060 | 1,072 | 1,072 | 1,010 | 1,008 | -4.9% |
| Net revenue YoY % | n/a | n/a | n/a | n/a | -4.3% | -4.2% | -4.8% | -4.9% | DECELERATING |
| Site rental revenue | 1,066 | 1,070 | 1,011 | 1,008 | 1,012 | 1,019 | 961 | 967 | -4.1% |
| Services & other | 54 | 49 | 50 | 52 | 60 | 53 | 49 | 41 | -21.2% |
| Organic growth ex-Sprint/DISH | -- | -- | -- | -- | -- | -- | 3.3% | 3.9% | Improving |
| Gross margin % | 75.5% | 76.1% | 74.7% | 73.8% | 73.9% | 73.8% | 73.7% | 73.4% | -36 bps |
| GAAP operating margin % | 47.5% | 51.0% | 49.1% | 47.7% | 49.0% | 48.8% | 46.0% | 46.6% | -112 bps |
| Adjusted EBITDA | n/c | n/c | 722 | 705 | 718 | 718 | 675 | 675 | -4.3% |
| Adj. EBITDA margin % | n/c | n/c | 68.1% | 66.5% | 67.0% | 67.0% | 66.8% | 67.0% | +45 bps |
| Net income | n/c | n/c | -464 | 291 | 323 | 294 | 151 | 94 | -67.7% |
| Diluted EPS ($) | n/c | n/c | -1.07 | 0.67 | 0.74 | 0.67 | 0.34 | 0.22 | -67.2% |
A note on margins. The prior draft of this analysis described gross and operating margins as "COMPRESSING" on the strength of a 2026Q2-versus-2024Q4 comparison (-264bps gross, -440bps GAAP operating). That is a prohibited cross-quarter comparison against a seasonal peak. On the YoY-compliant basis shown above, gross margin is -36bps and Adjusted EBITDA margin is +45bps — essentially flat. Only GAAP operating margin is meaningfully lower (-112bps), and that line carries the D&A and restructuring noise of a company mid-divestiture. The honest read is a flat margin structure on a shrinking revenue base, not margin collapse.
| Metric ($M) | 25Q1 | 25Q2 | 25Q3 | 25Q4 | 26Q1 | 26Q2 | Read |
|---|---|---|---|---|---|---|---|
| Operating cash flow | 641 | 832 | 714 | 870 | 509 | 531 | Not like-for-like |
| Capex | -40 | -40 | -43 | -59 | -57 | -59 | Rising (land buy-ups) |
| FCF (CFO less capex) | 601 | 792 | 671 | 811 | 452 | 472 | Positive; comp distorted |
| AFFO (clean FCF proxy) | 479 | 444 | 490 | 489 | 446 | 488 | +1.2% on 1H basis |
| Diluted WASO (M) | 436 | 437 | 437 | 437 | 437 | 434 | -0.7% -- shrinking |
| Total debt & other obligations | 24,377 | 24,290 | 24,319 | 24,337 | 24,682 | 18,239 | -24.9% YoY |
| Net debt / EBITDA | -- | -- | -- | 5.7x | -- | 6.33x | Top of 6.0-6.5x target |
The AFFO question, resolved
The reported 2026Q2 AFFO of $488M is +9.9% against a 2025Q2 base of $444M — but that base is an outlier. Every other 2025 quarter printed $479M to $490M. Comparing halves instead of cherry-picking the weak quarter:
- 1H25: $479M + $444M = $923M
- 1H26: $446M + $488M = $934M
- Growth: +1.2%
That is the honest number. The FY2026 AFFO guide of $1,975M against FY2025's $1,904M implies +3.7%, and that — together with positive CFO-less-capex — is what the "positive and growing FCF" gate should rest on. It is still a pass. It is not an acceleration.
Where the improvement actually came from. AFFO benefited from a $35M YoY drop in interest expense plus $14M more interest income following $7.2B of debt repayment out of $8.4B of fiber proceeds. Management explicitly flagged the interest-income component as non-recurring in H2. That is a real, durable benefit to the run-rate — but a one-time step-function, not a compounding operating trend.
| Metric ($M) | FY21 | FY22 | FY23 | FY24 rep. | FY24 cont. | FY25 cont. |
|---|---|---|---|---|---|---|
| Net revenues | 6,340 | 6,986 | 6,981 | 6,568 | 4,460 | 4,264 |
| Revenue YoY % | -- | +10.2% | -0.1% | -5.9% | -- | -4.4% |
| Site rental | 5,719 | 6,289 | 6,532 | 6,358 | 4,268 | 4,049 |
| Adjusted EBITDA | 3,816 | 4,340 | 4,415 | 4,161 | -- | 2,863 |
| Adj. EBITDA margin % | 60.2% | 62.1% | 63.2% | 63.4% | -- | 67.1% |
| AFFO | 3,013 | 3,200 | 3,277 | 3,040 | -- | 1,904 |
| Diluted EPS ($) | 2.53 | 3.86 | 3.46 | -8.98 | -- | 1.01 |
| Total debt | -- | 21,729 | 22,921 | 24,081 | -- | 24,337 |
FY2024 reported GAAP operating income and EPS include the ~$5.0B fiber goodwill impairment taken in 4Q24; restated continuing-ops operating income was $2,118M. Adjusted EBITDA and AFFO for FY2024 continuing operations are not disclosed at the full-year level in Daloopa. The FY24-reported and FY24-continuing columns are different bases and must not be read across as a single series.
| Metric | FY2026 Guide (mid) | FY2025 Actual | Implied YoY |
|---|---|---|---|
| Site rental revenue | $3,856M | $4,049M | -4.8% |
| Adjusted EBITDA | $2,690M | $2,863M | -6.0% |
| AFFO | $1,975M | $1,904M | +3.7% |
| AFFO / share | $4.59 | ~$4.36 | +5.3% |
| Organic growth (ex-churn) | 3.4% | raised from 3.3% | >90% contracted |
Management stated on the 2026-07-22 call that "we continue to expect 2026 to mark the low point for organic growth" and that it sees "a couple hundred basis points" of EBITDA-margin expansion over the next year, driven by land buy-ups and operating-cost programs.
Received $8.4B of net sale proceeds on May 1. Used $1.0B for buybacks at an average $88.66/share (over 11M shares retired, cutting the annual dividend obligation by $47M) and repaid ~$7.2B of debt — roughly $5B floating-rate, $500M of open-market repurchases, and $750M June plus $1.0B July unsecured maturities. Net debt fell from $24,577M to $17,099M; leverage landed at 6.33x, inside the 6.0-6.5x investment-grade target and matching management's stated 6.3x.
The catch: that well is dry. With a 92.6% AFFO payout, roughly $164M of cash is retained against $200M of discretionary capex. There is no organic deleveraging and no organic buyback capacity from here — see Valuation.
| Metric | Direction | Magnitude |
|---|---|---|
| Net revenue YoY | DECELERATING | -4.3% to -4.2% to -4.8% to -4.9% over four quarters |
| Site-rental revenue YoY | Improving at the margin | -5.1% to -4.8% to -4.9% to -4.1% |
| Organic growth ex-churn | ACCELERATING | 3.3% (1Q26) to 3.9% (2Q26); FY guide raised 3.3% to 3.4% |
| Services revenue YoY | DECELERATING sharply | +11.1% to +8.2% to -2.0% to -21.2% |
| Gross margin | Essentially flat | -36 bps YoY |
| Adj. EBITDA margin | FLAT / slightly up | +45 bps YoY |
| GAAP operating margin | Compressing | -112 bps YoY |
| Diluted EPS | DECLINING | -67.2% YoY ($0.67 to $0.22) |
| AFFO | Modestly growing | +1.2% on 1H basis; +3.7% on the FY guide |
| Share count | DECLINING | 437M to 434M; 11M+ retired for $1.0B |
| Debt | Sharply reduced | $24,682M (1Q26) to $18,239M (2Q26), -24.9% YoY |
Score: 4/10. Against the rubric's "5" anchor (revenue stable, margins flat, shares flat, FCF stable) CCI is worse on revenue (-4.9% and decelerating) and worse on GAAP margins, but better on share count (genuinely shrinking) and better on cash flow (AFFO growing, guide raised). It is nowhere near the "1" anchor — there is no dilution and no like-for-like FCF decline. Net base of 5, marked down to 4 for zero unit growth across three years, falling revenue per tower, a -67% EPS print, and the fact that the entire cash-flow improvement is attributable to a non-repeatable balance-sheet event rather than the operating business.