Ladies and gentlemen, thank you for being here. Welcome to the American Tower Second Quarter 2025 Earnings Conference Call. This call is being recorded. I would like to turn the call over to your host, Kate Reeb, Senior Director of Investor Relations. Please go ahead.

Good morning, and thank you for joining American Tower's Second Quarter Earnings Conference Call. We have posted a presentation, which we will refer to throughout our prepared remarks under the Investor Relations tab of our website, www.americantower.com. I am joined on the call today by Steven Vondran, our President and CEO; and Rod Smith, our Executive Vice President, CFO and Treasurer. Following our prepared remarks, we will open up the call for your questions. Before we begin, I'll remind you that our comments will contain forward-looking statements that involve a number of risks and uncertainties. Examples of these statements include our expectations regarding future growth, including our 2025 outlook, capital allocation and future operating performance and any other statements regarding matters that are not historical facts. You should be aware that certain factors may affect us in the future and could cause actual results to differ materially from those expressed in these forward-looking statements. Such factors include the risk factors set forth in this morning's earnings press release, those set forth in our most recent annual report on Form 10-K and in other filings we make with the SEC. We urge you to consider these factors and remind you that we undertake no obligation to update the information contained in this call to reflect subsequent events or circumstances. With that, I'll turn the call over to Steve.

Thanks, Kate. Good morning, everyone, and thanks for joining the call. As you can see from our results, 2025 continues to be a good year. Demand for our tower leasing, service group, and data center businesses combined with foreign exchange tailwinds has allowed us to raise our outlook for property revenue, EBITDA, and AFFO. These results highlight the ongoing strength of our global businesses and the durability of mobile network demand that underpins it. American Tower continues to offer a predictably compelling value proposition for investors against a volatile macroeconomic backdrop. I'll briefly share a few highlights and trends before Rod discusses more detailed results and outlook. Mobile data consumption continues to decline, driving increased demand for network capacity in every region where we operate. We see this demand capitalized in our extensive tower footprint and drive network upgrades as the sunset of legacy radios occurs faster than we've seen in early generations of G cycles. Carriers and developed markets continue to expand and mature their 5G networks as they work toward aggressive coverage and quality targets between now and the end of the decade, while emerging market players actively complete their 4G rollouts and selectively, yet increasingly, pursue the 5G cycle. In our developed tower markets, which consist of the U.S., Canada, and Europe, mobile traffic growth rates are anticipated to slightly outpace global averages over the next 5 years. Increasingly data-intensive use cases with mobile video, AI, and new devices will continue to stress networks and prompt both mid-band coverage and capacity-driven 5G activity across our tower footprint and rooftop sites. In the U.S., we see the 5G cycle playing out in line with our original expectations as carriers continue to sign upgrade activities, work toward 2026 5G coverage goals, and begin early densification or any colocation activity to improve network quality. We still see significant differences in mid-band rollout progress across our portfolio, positioning us well to capture substantial new business for both amendments and colocations, with the latter comprising an increasingly material share application mix for certain major customers. On a combined basis, total application volumes increased more than 50% year-over-year, representing strong broad-based demand for ourselves. Our U.S. services business posted a near-record quarter propelled mainly by outsized construction services, signaling our customers' increasing recognition of the quality, efficiency, and overall value that we provide through our best-in-class offerings. Next, our Europe business also continues to trend in line with expectations, benefiting from a healthy overall operating environment and strong customer agreements that provide both growth and installations from various customer shifts across the region. Mid-band coverage now stands at just about 55% of the markets where we operate, which is slightly ahead of the continental average and leaves a significant runway for more coverage-oriented activity as carriers pursue 2030 rollout targets. Additionally, spectrum extensions and related coverage obligations in Germany should unlock long-term investment and yield future growth benefits while bringing energy and momentum to 5G rollout activity in the near term. In our emerging markets, we've raised our outlook due to a mix of foreign exchange tailwinds and core leasing outperformance. Our Africa business continues to post robust growth results benefiting from a stabilized lower churn carrier landscape, better consumer pricing in key markets, and supportive demand dynamics. 5G maturity remains limited in the region, with most activity focused on 4G rollout and densification, but we do see early 5G deployments continue to progress in select urban areas, propelled by use cases of fixed wireless. Activity has improved in markets like Nigeria, where higher consumer prices are supporting better carrier economics and unlocking stronger levels of network investment. Growth in Latin America remains muted relative to historical trends, and our expectations for persisting low single-digit growth through 2027 remain unchanged. However, consolidation has normalized in Brazil, and new activities are anticipated across the more stabilized 3-player market as carriers work to fulfill regulatory commitments in the region and realize better margins from higher ARPUs. Our outlook for the region has modestly increased, but along with some improvements in markets like Brazil, we're seeing continued elevated levels of churn as carriers rationalize the infrastructure and acquire the consolidation activity. Moving to our data center business, we continue to see exceptional performance from CoreSite and have increased our 2025 expectations to reflect new growth attributable to the recently acquired DE1 facility, as well as elevated demand and pricing from our broader portfolio of interconnection data center facilities. Hybrid and multi-cloud IT architecture requiring secure low latency interoperability remains a primary driver of demand. The early phases of AI-related workloads, including inferencing, machine learning models, and GPU as a service, represent a fast-growing component of CoreSite leases. Capacity constraints from high absorption rates and continued AI-driven demand from both very large hyperscale players across the wider market and the enterprise customers that value our interconnection ecosystem are driving a sustained favorable pricing and pre-leasing environment that we expect to continue into the foreseeable future. These tailwinds have enabled us to remain selective in our customer mix to curate high-quality ecosystems while exceeding our initial underwriting assumptions. We plan to continue to prioritize funding CoreSite on a success basis and in line with our capital allocation strategy to replace supply and facilitate future revenue. Overall, our outlook is generally looking up as we have the second half of 2025, but we remain focused on delivering our differentiated value proposition and staying true to our stated strategy. Our experienced team is well versed in addressing certain ebbs and flows across our global footprint, and our strategic long-term focus enables us to benefit from the durability of tower leasing and growing mobile data and competing demand trends. Our superior global portfolio, best-in-class services and customer delivery, high-quality balance sheet, protective contracts, and highly disciplined approach to capital allocation already enable us to extract significant value from the global tower landscape, but we remain motivated to continuously improve and deliver even more compelling returns to our stakeholders. Now I'll hand it over to Rod to discuss second-quarter results and our revised 2025 outlook.

Thanks, Steve, and thank you all for joining the call. As noted in this morning's press release, we had a strong second quarter driven by resilient demand across our global portfolio, and we are well positioned to benefit from growing mobile data consumption and confident in our ability to sustain growth through the second half of the year. Before diving into our Q2 results and our revised full-year outlook, I'll share a few highlights. First, leasing momentum remains strong, resulting in consolidated organic tenant billings growth of 4.7%. Our U.S. services business had a near-record quarter while application volumes among the big 3 were up over 50% year-over-year. This was primarily driven by amendment upgrades and a 200% year-over-year increase in colocations. CoreSite also had an exceptional quarter with double-digit revenue growth and gross margin expansion, fueled by hybrid cloud demand and AI-related use cases. Strategically, we closed the acquisition of our DE1 data center asset in Denver and deployed over 75% of our discretionary capital in developed markets, rising to over 85% when including acquisition capital. Finally, we strengthened our balance sheet by issuing EUR 500 million in senior unsecured notes at 3.625%. Proceeds were used primarily to pay down existing debt. At quarter-end, floating-rate debt was approximately 7% of our total outstanding debt, and net leverage stood at 5.1x. Turning to second-quarter property revenue and organic tenant billings growth on Slide 6. Consolidated property revenue grew 1.2% year-over-year and more than 3% when excluding noncash straight-line revenue despite absorbing more than 70 basis points of foreign exchange headwinds. Year-over-year growth was negatively impacted by 2% due to a change in nonrecurring revenue in the current period relative to the prior year. U.S. and Canada property revenue declined by more than 0.5% and grew approximately 3% when excluding noncash straight-line revenue, despite absorbing more than 100 basis points of Sprint churn. International property revenue grew approximately 1% year-over-year and approximately 3% when excluding the impacts of foreign currency fluctuations. Finally, property revenue in our data center business grew over 13%. Moving to the right side of the slide, consolidated organic tenant billings growth was 4.7%, driven by solid demand across our global portfolio. In our U.S. and Canada segment, organic tenant billings growth met our expectations at 3.7% and greater than 5% when excluding Sprint-related churn. Our international segment drove 6.5% in organic tenant billings growth, a modest step down from Q1 2025, reflecting generally consistent leasing trends paired with slightly lower contributions from escalators and churn. Turning to Slide 7, adjusted EBITDA grew 1.8% and approximately 4.5% when excluding noncash net straight-line, despite absorbing approximately 90 basis points of foreign exchange headwinds. Growth was positively impacted by continued direct expense management, resulting in a high conversion of cash property revenue and a greater than 100% increase in U.S. services business gross profit, partially offset by the flow-through of nonrecurring revenue benefits in the prior year period, increased bad debt associated with Latin America customer collections and other nonrecurring and timing-related costs. Cash adjusted EBITDA margin declined 40 basis points year-over-year, partially driven by a higher contribution from U.S. services. Moving to the right side of the slide, attributable AFFO and attributable AFFO per share declined by approximately 6.7% and 6.8%, respectively, primarily due to more than $65 million of prior year revenue reserve reversals in our India business. On an as-adjusted basis, normalizing for the sale of India, attributable AFFO per share growth was approximately 2.4%, driven by the high conversion of cash adjusted EBITDA growth to AFFO through the effective management of below-the-line costs, partially offset by flow-through of nonrecurring revenue benefits in the prior year period. Now turning to our revised full-year outlook. As you will see on the next few slides, our core year-to-date results and expectations for the second half of the year are contributing to improvements across property revenue and adjusted EBITDA compared to our prior outlook. In addition, our revised foreign exchange assumptions are providing tailwinds of $130 million, $80 million, and $55 million to property revenue, adjusted EBITDA, and attributable AFFO, respectively. As a result, we are raising our expectations for property revenue, adjusted EBITDA, attributable AFFO, and attributable AFFO per share by approximately $165 million, $120 million, $55 million, and $0.12, respectively, compared to our prior outlook. At the midpoint, our expectation for attributable AFFO per share is $10.56 or approximately 6% year-over-year growth on an as-adjusted basis. Turning to Slide 8, we are increasing our expectations for property revenue by approximately $165 million compared to our prior outlook, which includes $130 million of foreign exchange tailwinds and $15 million of consolidated core property outperformance and $20 million of additional upside, consisting of an approximately $25 million increase in straight-line revenue, partially offset by an approximately $5 million decrease in pass-through revenue. Consolidated core property outperformance includes upside from international and CoreSite including incremental contributions from our recently acquired DE1 asset; outperformance was partially offset by slower commencements compared to initial expectations related to a customer in the U.S., which affect organic tenant billings growth expectations that I will touch on in a moment. Moving to Slide 9. We are reiterating our organic tenant billings growth expectations of approximately 5% on a consolidated basis. We have revised our expectations for the U.S. and Canada organic tenant billings growth to approximately 4.3%, reflecting slight timing differences due to modestly slower than initially anticipated pacing of new business. Importantly, while the timing of commencements could result in some quarter-to-quarter variability, it does not change our overall expectations to capture the new business. In addition, we are reiterating our organic tenant billings growth expectations of approximately 5% for Europe, raising our expectations for Africa and APAC to greater than 12% due to solid carrier activity and slightly lower churn expectations, and raising our expectations for Latin America to greater than 2% driven by modestly higher-than-expected contributions from CPI-linked escalators. Turning to Slide 10. We are increasing our adjusted EBITDA outlook by $120 million compared to our prior outlook, driven by the conversion of property revenue, services gross profit, and foreign exchange tailwinds, partially offset by nonrecurring expense items, including incremental bad debt associated with certain Latin America customers. Moving to Slide 11. We are raising our expectations for AFFO attributable to common stockholders by $55 million at the midpoint or $0.12 on a per share basis. Cash adjusted EBITDA outperformance and foreign exchange tailwinds are partially offset by increased minority interest and maintenance capital. Our revised attributable AFFO per share midpoint is $10.56. Year-over-year, AFFO per share growth is now expected to be approximately 6% on an as-adjusted basis. Turning to Slide 12. We are modestly revising our 2025 capital plans, which include approximately $1.7 billion in capital expenditures, down $20 million compared to prior outlook and contemplates a 100 site reduction in Latin America and consistent data center spending. We continue to expect to distribute approximately $3.2 billion to our shareholders as a common dividend, which remains unchanged from our prior expectation and subject to Board approval. Moving to the right side of the slide. Our balance sheet is strong, providing financial flexibility and optionality, including $10.5 billion in liquidity and low floating rate debt exposure. Turning to Slide 13 and in summary, we are pleased with our results through the first half of 2025, which highlight the criticality of our assets, the resilience of our business model, and the outstanding execution of our talented employees. We are confident in our ability to deliver sustainable growth and long-term shareholder value. And with that operator, we can open the line for questions.

Our first question is from the line of Michael Rollins with Citi.

So first, I'm curious if you could dig further into the different observations for domestic leasing. You talked about the increase in applications from amendments and colo/densification, but also the delay in commencements from one of your customers. So can you talk about a little bit more about how that's affecting the second half of the year and is that setting up 2026 to be a better year and to get some of these benefits to come through? And then secondly, I was just curious if you could provide an update on the opportunities to extract an incremental layer of efficiency within the business?

Yes, thank you, Mike. I'll cover both of your points. Looking at the U.S. leasing landscape, we are pleased to see the rise in application volume that we anticipated at the start of the year, which aligns with our projections. Across the board, there's a healthy level of activity, an ongoing increase in our pipeline, and more new colocations, all of which are encouraging. We are optimistic about these developments, indicating a robust leasing environment. With regard to our pipeline expectations, the volume from our customers remains consistent, along with pricing. However, one of our customers, who is not part of our holistic agreement, has been slower in converting leasing into actual commencements than we had predicted. Our initial forecasts had outlined a specific rhythm for this process, but it's lagging a bit. That said, the difference amounts to just a few million dollars within a year, and the OTBG metric is quite sensitive to the timing of these commencements. When we assess the overall health of the business and our confidence in securing new business, we don't see any signs of a slowdown. The application pipeline is not drying up, and we have not encountered cancellations. The process of signing leases, returning them, and installing equipment is just proceeding at a slower pace. Overall, nothing suggests that the leasing pipeline is anything less than strong. As for guidance for 2026, we believe a solid pipeline is crucial, and our current pipeline supports our long-term outlook. We do have less contracted revenue anticipated for the next couple of years compared to previous years, making us more reliant on activity-based revenue commencement. We are eager to see this pipeline develop further, which is promising for us. We still expect churn to trend downwards, exclusive of the recently approved U.S. Cellular transaction. We will monitor how this affects our situation in the next few years. On the topic of extracting value, I’ve given Bud time until the end of the year to provide guidance. The progress is going well, and we have received positive feedback globally regarding our globalization efforts, with the team identifying fresh opportunities. To manage expectations, we are examining our total addressable spend, which encompasses direct expenses, operations and maintenance, selling, general and administrative expenses, growth CapEx, and supply chain costs. Our overarching goal is to achieve a consistent increase in gross margin for our tower business. While we don’t expect a significant reduction in direct expenses—some of which are just inherent in doing business—we aim to lower the growth rate of those expenses so that they lag behind revenue across all regions consistently. As Bud refines this initiative, it will be a multiyear objective to reduce that cost curve, allowing for better margin expansion than would otherwise be anticipated. We will keep working on this and will share specific targets by year-end. Thus far, everything is progressing as we hoped when we embarked on this journey, and we’re optimistic about the potential for value creation over time.

Michael, this is Rod. Maybe I can add just a couple of quick points there for you to follow up on Steve's comments. Regarding new business, all the things that Steve mentioned around timing in the U.S., you'll see that play out in our numbers, primarily in new business in organic tenant billings growth. So we were at a projection of about $165 million, or slightly better for new business. With this revised timing of the pacing of some of the deployments, that number is expected now to be more like $160 million. And it is a timing-related issue, as Steve mentioned. And what that does is it affects OTBG in a very modest or subtle way. Our original guide was equal to a greater than 4.3% in the U.S. We've adjusted that to approximately 4.3% just to reflect the fact that we could be at 4.3% or slightly below because of this mild timing. So just to give you a little bit of numbers there. And then I would just make one quick comment on SG&A. For the full year of 2025, we expect to be roughly flat on SG&A, excluding the bad debt. And that's after absorbing things like a few legal fees for some of the customer issues that we have in Latin America as well as managing through the very robust business in CoreSite. There is some added SG&A there to support that double-digit growth. So you'll see us absorbing that and also keeping SG&A flat with a few other kind of timing issues in there.

Our next question comes from Rick Prentiss with Raymond James.

A couple of questions. Follow-up, Steve, you mentioned U.S. Cellular T-Mobile deal now is approved. Can you frame for us what that USM exposure you think might be and the timing for that? And then obviously, more speculative, just maybe an update on DISH, what you're seeing there and what the exposure is there.

Sure. So with respect to U.S. Cellular, in absolute terms, not the overlap, but the total amount of new business we have with U.S. Cellular represents about less than 0.5% contribution to our property revenue—our global property revenues—and less than 1% to our U.S. and Canada property revenues. So it's relatively small exposure overall. And if you look at that portfolio, what we don't know yet is what T-Mobile plans to do with those sites. And so as we're looking out over the next couple of years, a lot of it depends on what their plans are. We haven't been able to have discussions on that because the deal wasn't approved yet. So that's kind of a worst-case scenario. We certainly wouldn't expect to lose all of that, but there will be some of that that they're going to want to churn off of as part of their synergies, and we'll work with them on that, similar to the way we have in the past. And so as that closes and we have those conversations, we can give you guys a little bit more visibility into it over time. And by the way, those percentages are of total revenue, not new business. That's less than 0.5% of property revenues and 0.5 percentage of U.S. and Canada revenues on that. With respect to DISH, we continue to watch the situation like everybody else does and to see what's happening there. We think there have been a few positive developments in terms of some of the things that they said publicly that they're doing, so we feel pretty good about that. The overall exposure to DISH is they represent about 2% of our global—over 2% of our global revenues, slightly over 4% of our U.S. revenues. And that's, again, total exposure for that portfolio. But again, what we're seeing is the same thing you guys are seeing; the headlines are slightly positive lately. So we're optimistic and hopeful that they'll work through their situations and continue to deploy.

Hey, Rick, if I can add. Sorry, just regarding the churn since you brought up churn, I've been looking forward to saying this for a few years here, but just to remind everyone that we are in our final year of the Sprint churn. So when you think about the churn percentages for Q3, we were at a little over 2%, maybe 2.3% total churn in our U.S. business. As we work through the churn this quarter for Sprint, it won't be in our Q4 numbers or any numbers beyond that, and we expect churn as a percent to drop down to about 100 basis points or maybe even below for Q4 and then probably stay in that lower end of our range between 1% and 2% as a churn number, kind of staying at the lower end of that, closer to 1% for a little while, excluding the things Steve just talked about in terms of U.S. Cellular.

Lot of discussion lately about direct-to-device satellite connectivity. You guys own a piece of AST-S. Update us a little bit about what you're seeing in direct-to-device and what you think it might mean U.S. versus international?

We continue to see direct-to-device as the complementary technology to the macro cell networks. Delivering bandwidth via macro towers continues to be the cheapest way to deliver bandwidth to the customers, no matter where they are. So we don't view it as a threat at all to our business in the U.S. or internationally, quite frankly. The places where satellite is going to be ideal are those with lower population densities than what the carriers would like to cover through macro towers. So when you think about the Grand Canyon or rural Montana, those are places where that's going to be an excellent way to provide coverage. And we don't have towers there. And frankly, I don't want to build towers there because there's not a good business case for doing that. Same thing internationally. If you look at sub-Saharan Africa, there are going to be places that are much better served by satellite. And again, we don't have towers in those areas and don't want to build towers in those areas. So overall, we believe it's complementary, not competitive. So if you think about where the satellite coverage is optimal, it's less than 100 pops per site, per some of the research just kind of been cited out there. So we view it as a nice niche market. We're happy with our investment in AST. We're really happy with the ringside seat that we have to see how this plays out. And it's all playing out just the way we thought—no threat and complementary, and might make a nice little profit on our investment there.

One moment for our next question, please. Our next question is from the line of Nick Del Deo with MoffettNathanson.

First, just to dig in a bit more into your prior comments, Steve, regarding the customer that's moving a bit slower than you had expected. Just to be clear, is this just a lengthening of the book-to-bill cycle, so they're kind of a plan in signing leases that expected, but it's just dragging it in terms of when they get on air? Or are you seeing the applications come in with a bit of a delay?

No, it's exactly what you said. It's the book-to-bill cycle is a little bit longer. The application pipeline continues to be healthy. It's just not moving along as quickly as we anticipated to do.

So it's in your backlog, it's just purely timing then.

Exactly.

And then maybe switching to CoreSite. Could you talk a little bit about CoreSite's position in the supply chain and kind of the risk management strategy you have in place. In particular, I'm thinking about the jump in demand for a lot of key components to support big projects from both established and new players; I'm curious as to whether it's becoming at all more challenging for CoreSite to kind of keep its place in line.

Well, a lot of the supply chain challenges really started during COVID. And so that whole supply chain process lengthened several years ago. We had to adjust our strategy then. So we started prebuying those long lead-time items several years ago. And the way you secure your place in line is you got to pay. So you put a deposit down on that equipment. And so we've been very proactive in looking at that over time and securing those places. The other component that we're watching very closely like everyone else is, is the effect of potential tariffs on some of those supplies because a lot of those components can only be sourced overseas. And what we're doing to protect ourselves there is building a contractual mitigation so that if there are an increase in cost, what we're doing with pre-leasing is that we have a mechanism to adjust that to make sure that we're getting that mid-teens stabilized yield that we're underwriting on things. So I feel very good about the actions the teams have taken to be able to secure that. And for all of our kind of development pipeline that we have in view and the things that we've planned out, we're secure on that. It may make it challenging to accelerate things from the pace that we originally wanted. We'd like to accelerate some of this development because the demand environment is so healthy right now, and it does make that a little bit more challenging, but we are finding ways to do that in some circumstances as well. So certainly a challenge out there that we're all facing, but something that I've talked to the team has done a good job of getting ahead of.

And sorry, can I ask one quick housekeeping item on the CoreSite front as well? Anything you can share about the inorganic contribution from the Denver Gas & Electric Building acquisition, both financials and what it may have meant for interconnection adds, which looks like they may have had an inorganic bump.

Let me talk about the acquisition kind of more broadly. And then I don't know if we have any financials that Rod can share at hand right now. But that building was one where we already had a presence. It was the lease facility for us, but we didn't have the whole building. And so we had the opportunity to buy the whole building. And if you have a chance to take that interconnection hub and make it owned versus leased and pick up some incremental new business and incremental interconnection along the way, that's always a good thing to do. So we're very happy that we have the opportunity to do that, and it is the most highly interconnected site in that Denver area. So that gives us another kind of feather in our cap in terms of that portfolio. And Rod, I'm not sure if we put any public numbers out of the acquisitions or something you want to share on that or not.

Yes, just a couple of points that I would make for you, Nick. So we did close on the DE3. We have it in our outlook. I think I made a couple of comments in the script there, but you can assume that there's roughly $10 million in property revenue in our updated outlook coming from DE1.

Our next question is from James Schneider with Goldman Sachs.

Maybe just a quick follow-up on the data center business, and then I wanted to ask about Latin America. On the data center side of things, DE1, $10 million of property revenue this year, is that a good run rate to use for next year? Or could we expect a bigger kind of run rate contribution for the full year of 2026? And maybe just kind of talk about directionally whether you expect the overall CoreSite business to sort of grow the same, better, or decelerate next year relative to this year on an organic basis?

Yes. Thanks for the question, James. So the $10 million is the in-year number that reflects the fact that we completed the acquisition earlier this year in Q2. So with that said, there would be a full year impact next year, so you'd want to prorate that. But I don't want to get into any more details around what the exact impact would be for next year. Regarding CoreSite, you can pick up in Steve's comments, his prepared comments as well as mine, the CoreSite business continues to perform very strongly, with revenue growth up in the 13%—better than 13% for the quarter. We expect a very similar number of revenue growth for the full year. That double-digit growth also extends down into interconnection growth, which is a key element of that business. So we expect interconnection to grow—interconnection revenue to grow by double digits. We also are seeing margin expansion in the business. As I mentioned earlier on this call, we have a little bit higher SG&A in CoreSite to support the demand that we're seeing and all the new business that we've booked. So you'll see a slight bump up in SG&A, but our operating profit margin is also expanding year-over-year this year by about 100 basis points. So the business continues to perform exceptionally well. Based on the last several years of either near record new business or record new business as we had in '23 and then again in '24, we expect that double-digit growth to continue for the next couple of years based on kind of exhausting that backlog and delivering all those new business contracts. So we couldn't be more pleased with the performance of CoreSite, not just the last several years but going forward as well.

And then as a follow-up, maybe if you can kind of talk about the Latin America business. It sounds like things are stabilizing or potentially improving there. Are we at a point where you can call a bottom in Latin America? And to what extent could you expect some significant acceleration hitting in 2026?

Yes. We're still anticipating to have low single-digit growth for the next couple of years there. So through 2027, we're going to continue to deal with the dynamics of that market where you have higher churn. We've taken a little bit of a reserve on some collection issues there as well. And as that market continues to go through the challenges of consolidation and what's happening there, it's going to be a challenge for the next couple of years. And it's all the things we've talked about, things like Oi in Brazil and some of the consolidation in some of the other markets there. So you should expect to see that continue to be a challenge for the next 2 years. And we think that the inflection point is really going to happen in 2028. That's when we see things getting significantly better for us there.

Our next question is from Michael Funk with Bank of America.

So just coming back to the conversion from leasing to commencement from the one customer. Just wondering if anything in your experience in the past could inform our view on the timing and what might move that forward?

It really just comes down to their priorities and what they're trying to accomplish and how they're incentivizing their teams. So there's nothing specific that I would point to in this circumstance. When you look at kind of the relative positioning of the 3 major carriers, we have one that's got about 85% of our sites upgraded to mid-band 5G, one is at about 70% and one is still about 50%, which implies quite a bit of work to do to get to that kind of upper 90s percentage, which is where we think we'll end up with mid-band 5G on the site. And so when we were doing our forecast at the beginning of the year, the way we construct that is we're going based on what the pipeline looks like, what we're hearing the priorities are for the people in the field. And then you're only talking about a relatively small slowdown in that conversion rate. So there's like a major catalyst that we're seeing on it. And I don't want to speculate as to the reason because no one gives us a reason for it. I think it could just be the pace at which they're doing the deployments. So there's nothing in this from kind of a prior G or prior deployment that I would look at and say there's a comparison in this. It's just a little bit of a slow start to the year, quite frankly.

So nothing to point to either on the labor side, equipment provisioning, or if it's simply a capital budget decision; nothing to really point to there?

There's nothing pervasive. I mean, I'm sure every site has its own story, but there's no kind of general trend there.

I think in your prepared remarks, you mentioned that conditions in Europe are actually unchanged, and I believe you referred to Germany. Could you provide more details on what you're observing in Europe and your expectations for that region?

Sure. I'll touch on it and Rod, if you want to jump in. We continue to see the European carriers steadily deploying the band 5G on their site. And there's kind of a mixed bag in terms of how far along they are on that. But there are some targets in the EU to get to a certain percentage of mid-band 5G deployment by 2030. So there's still quite a bit of work left to do there. So what we're seeing on that front is we're seeing our anchor tenants continue to do amendments to get there, and we're seeing some continued deployments by other carriers. There is some consolidation that's happening in a few markets. And our exposure, that's relatively modest. It's not 0, but it's relatively modest in terms of what that consolidation churn could be. And that will slow down, some of these carriers and their deployments a little bit. But overall, the leasing pipeline there is consistent with what we had in our underwriting for the deal originally. It's consistent with our kind of mid-single-digit organic growth in Europe that we're expecting to see. So overall, it's kind of right in line with what we thought. And none of the consolidations or kind of other news in the market is concerning us at this point.

Nick, if I could just add a—or I'm sorry, Michael, I'll just add a couple of comments around the stability of the revenue growth expectations and particularly the organic growth. So it's a solid kind of steady mid-single-digit organic new business, let's call it in around 3.5% contribution to organic tenant billings growth comes from that new business. That's pretty consistent with where it was last year. I think across most of the markets there, we have CPI-linked escalators that add a little bit more to that, another 2.5%. And one of the other very important elements is that the churn percentage is historically pretty low, and the way that our contracts work, particularly with one of our largest customers, we expect that churn percentage to be below 100 basis points kind of going forward. It's been there for a couple of years since the acquisition. So you put all those things together, and you get a very reliable and durable organic tenant billings growth in the mid-single digits, again, in a very high-quality market, high-quality economies, there with high-quality counterparties. So again, the acquisition that we did in Europe in our general Europe business is very steady, very solid and of a high quality.

Our next question is from Eric Luebchow with Wells Fargo.

Rod, I think you talked about a 200% increase in colocations year-over-year. So I'm just curious what the mix is in your guide for this year, how that might trend after 2025? And then I wanted to touch on capital allocation as well. With leverage kind of around 5x now, how are you thinking about buybacks versus M&A going forward? Maybe just a quick review of what multiples and what regions you might be interested in?

Yes. Sounds good, Eric. So regarding the colocation increase in terms of its contribution. I would start off by saying colocation contributions continue to be relatively small in the grand scheme of things. So let's call it just over 10% of our applications that have been coming in our colocation applications. Now that's up from where it was in the recent past year. So we are seeing a shift towards colocations, but it's on small numbers. To put it in the grand scheme of things, if you think about applications being up in the 18,000 range or even a little bit higher, you're talking a few thousand— a couple of thousand colocations, 2,500 to 3,000 colocations kind of in total. So we are seeing hundreds of additional colocations, but it's not thousands yet. So I would put it in the category of we're seeing the beginning of a shift towards colocations, the beginning of an increase towards colocation as a bigger contributor to our new business. This may be the beginning of densification, but it's still early days. And with that said, I wouldn't want to predict where that's going to go in '26 or beyond. We'll just have to wait and see what the carrier plans are when they get to full 5G kind of across the board and when they may actually turn to more densification.

Before we go to the next question, I would just jump in and say, just refer back to the percentages that I gave earlier of about 50%, about 75%, about 85% going—that are already at our mid-band 5G, that still implies a good-sized pipeline of amendment. So we would expect amendments to be a large portion of our pipeline going forward. But we do expect this continued trend of more colocations to continue to accelerate. We do think densification is starting. And I've talked about this on our last call, the conversations we're having with carriers and the data requests that they're putting in are definitely supportive of the idea that we will continue to see densification as they continue to flop their networks and they become stressed.

Yes. And then Eric, regarding your question around capital allocation, you are correct in pointing out that we're about 5.1x leverage for the end of Q2. We still are marching towards 5.0 or below by the time we get into the second half of the year. So we're on pace with that. And the plan there is unfolding perfectly fine. One of the elements of being a 5.1x now is with the strengthening euro up against the U.S. dollar that did drive an increase in our European, the amount of U.S. value in our European debt, which does impact leverage slightly. So we're at about 5.1x. We want to push that down towards 5 or below. And once we are there, and I would say we're close enough to be there that we've already regained some financial flexibility, let's call it full financial flexibility. So with that said, let me highlight what our capital allocation priorities are. First and foremost, we fund the dividend. That dividend in the last couple of quarters has represented a 5% growth rate. We've talked in the past that we would expect because we're a REIT, that our dividend growth will largely be in line on average over multiple years with our AFFO growth. So you can think of that in the context there. We do expect to fund the dividend with a growth that's sort of in line with our AFFO growth on average. That's priority number one. Number two is we have a CapEx program with internally generated projects that we prioritize because we like the returns, the contribution to the business, the long-term value that that capital can drive for our shareholders. So we invest this year about $1.7 billion. It's been between $1.5 billion and $2 billion over the last few years. We expect that to continue as we have a robust pipeline of places to put that capital. And again, we think it's a compelling use of capital to drive shareholder value. And then beyond that, we have options to either reduce debt and delever well below 5x, or we could deploy that capital towards more inorganic growth through M&A. I think you know our priorities there around looking to expand and increase exposure to our developed markets, which U.S., Europe, and CoreSite as well. And then beyond that, share buybacks are an option. So we will always be toggling between and evaluating reducing debt, M&A, and share buybacks with an eye towards making the decisions really on a quarterly basis and annual basis that drive the most shareholder value that represents the best opportunity at that time. And you may see us kind of bounce back and forth here and there. We've talked many times about the capital programs, but I also want to highlight the fact that within our capital programs, that $1.7 billion, that actually represents some of our priorities, where we've decreased the amount of capital investments in some of our emerging markets at the same time that we've increased capital investments in the U.S. in our data center business and even in Europe. So you see our priorities showing up within our capital spending. But what I would say in the final comment here is everything is on the table for us, and we will be making decisions in the best interest of our shareholders over the long term. That certainly could include share buybacks, delevering, or when and if we see compelling M&A, we'll certainly look at that.

Our next question is from the line of Benjamin Swinburne with Morgan Stanley.

Steve, I was wondering if—I know you get this question a lot, so I figured I'd ask it given just the performance of CoreSite continues to be impressive and accelerate. Just the strategic lens that you guys look at this business within American Tower, particularly as it relates—as you talk about maximizing value. Does the fact the business is performing better make you more or less interested in exploring strategic options? Or just any change in your philosophy as you watch the business perform well would be helpful to hear as you guys think about maximizing value on this business.

Sure. Well, just to remind everyone, the reason that we bought CoreSite was that we believe that when you look at where the puck is going, to use our Boston analogy on that, we think that edge compute is a huge opportunity to drive value to our Tower portfolio over time. And we believe that owning the access to the interconnection environment that, that edge has to be connected to gives us a right to win in that space. Our initial timing on that was a little bit off; it's developing slower than we thought it was going to. But we are confident and probably more confident today than we were even back then, that the edge is going to develop the way we envision that doing. One of the ways that we're seeing that is the wireless carriers are now talking about edge and doing local breakout that's actually appearing at the edge. You're starting to see them express more interest in the space. So we still think that that strategic reason for buying CoreSite holds true. When you look at the asset itself, the way we underwrote that investment is we underwrote it as a standalone. In other words, we weren't putting the value of the edge over the value of the asset when we bought it. We were just looking at the underlying business and said, can we make that work on a business case, and we were confident that we could. So in a way, the edge was kind of going to be the gravy on top of the investment, but it was a strategic reason for doing it. The asset is performing better than our underwriting. Some of that's derived from AI and what's happening in the whole ecosystem where it's taking up a lot of the capacity there. That's driven up pricing, which has helped us to underwrite better yields and continue to curate our customer mix the way we like to, but also lease up faster. So it is performing exceptionally well as a standalone asset. That doesn't really change my assessment of what we're going to do with the asset over time. It really comes down to what's going to create the most value for our shareholders. We still think the edge is a compelling play that will develop over time. And if for some reason that doesn't, then we'll make the assessment about what to do with CoreSite. Our focus in the meantime is to maximize the value of CoreSite. And so we continue to invest what we need to invest to maximize that value. We set up a private capital partnership to give us flexibility in terms of how we finance it. So there's never a situation where CoreSite feels like you can't do what it needs to do to maximize that growth. So we think that we're doing all the right things to create the most value for the shareholders, regardless of what ultimate decision with CoreSite is down the line.

And just maybe one more. I thought it was interesting last week, AT&T sounded more excited about fixed wireless than I'd heard them in the past. Their growth in that business is accelerating and talked about opening up more mid-band for that product. Are you seeing—I know, again, you don't see that directly in the business, but any sense in the application activity or anything else with AT&T or your other carriers on fixed wireless starting to be a more clear tailwind towards capacity needs for your customer base?

At this point, all of our customers say that they're using fallow capacity in the network to support fixed wireless, and there's nothing that we're seeing that differs from what we're hearing from the customers publicly on that. I think where you would see that over time is if you start seeing rural sites that typically didn't get multiple amendments in the 4G cycle, get multiple amendments in the 5G cycle. That might be an indication. We're not seeing that yet. And we're not seeing any standalone fixed wireless installations at this point. However, as you point out, all the customers are becoming more bullish on it. I'm very bullish on it. I come from a rural area where you don't have good broadband phone. I'm actually excited to see it expand in my home state. I think that if you look at the number of subscribers they've got, the ARPUs they're getting. To me, that's indicative that they could make this a separate business that could support incremental investment. And if and when that happens, that's incremental to our base case in terms of what we would see in terms of the activity on our site. So that could be an upside for us. We're not seeing it yet, but I do hope that we do see that over time.

Our next question is from Aryeh Klein with BMO Capital Markets.

Maybe just on the services business, which has been quite strong. Curious if you could talk to what's been underpinning that, because they have higher periods of carrier activity with lower services level. Is there anything new there or different that you're doing? And where do we kind of go from here?

No. The services business is indicative of two things. The first is a robust application pipeline. And so there's a segment of our services that we do for all of our customers kind of nationwide. And that's things like acquisitions, owning, and permitting, engineering services, things like that. That component is really volume-driven. So we can see the application volumes go up, which gives good tailwinds to the services business there. There's another piece of it that's a little bit bigger chunk of the pie this year, which is construction management, which we don't do everywhere; we don't do it for everyone. It's very much a niche business that we do where we have really capable teams in place and where our customers are asking for that turnkey service because it lowers their total cost of ownership. It increases the value proposition there. And that's a little bit bigger piece of the pie. But what you should read in terms of our services business this year is it gives us the indications of a healthy pipeline, and we're getting some good business in construction management. That construction business comes in a little bit lower margin. So you will, over time, as that continues to grow, see some compression in the margin on the services business, but it's still a very healthy business, and it's good for us because it is some incremental cash flow, but also increases customer satisfaction and stickiness.

Thanks, everyone, for joining the call today. Please feel free to reach out to the Investor Relations team with any questions. Thanks.

Thank you. And this concludes our conference for today. Thank you all for participating, and you may now disconnect.