Crown Castle Inc. 2026 Q3 Earnings Call

Please go ahead. Thank you, Chuck, and good afternoon, everyone.

Thank you for joining us today as we discuss our third quarter 2026 results. With me on the call this afternoon are Chris Hillabrant, Crown Castle's President and Chief Executive Officer, and Sunit Patel, Crown Castle's Chief Financial Officer. To aid the discussion, we have posted supplemental materials in the investors section of our website at crowncastle.com that will be referenced throughout the call. This conference call will contain forward-looking statements, which are subject to certain risks, uncertainties, and assumptions, and actual results may vary materially from those expected. Information about potential factors which could affect our results is available in the press release and the risk factor sections of the company's SEC filings. Our statements are made as of today, October 21st, 2026, and we assume no obligation to update any forward-looking statements.

In addition, today's call includes discussions of certain non-GAAP financial measures. Tables reconciling these non-GAAP financial measures are available in the supplemental information package in the investors section of the company's website at crowncastle.com. With that, let me turn the call over to Chris.

Thank you, Hamilton, and good afternoon, everyone. As I reflect on my first year at Crown Castle as CEO, I am pleased with the meaningful progress we have made to sharpen our strategic focus, simplify the business, and build a strong foundation for future growth. Over the past year, we have taken several significant steps towards becoming a best-in-class U.S. tower operator, in addition to completing the sale of our small cell and fiber businesses. First, at the beginning of the year, we took decisive actions to align our cost structure with the current business model while preserving our ability to support customers, deliver best-in-class efficiency, and enable future growth. These actions resulted in $65 million of annualized run rate operating cost savings. Second, we launched an enterprise-wide transformation program to create a more efficient and scalable operating model that supports our long-term growth objectives.

Our transformation program spans the entire business and includes initiatives such as modernizing our systems, optimizing our facilities footprint, and reducing corporate non-labor costs. This year, we launched a new project management system, improving the application-to-on-air process, and a new field services system, enhancing our asset information and utilization data. We are also on track to exit our transition services agreement related to the previous sale of our fiber and small cell businesses, which we believe will allow us to further simplify our corporate functions. Third, we continue to scale our ground lease buyout program while meeting or exceeding our target returns. In 2026, we expect to purchase more than 400 ground leases, more than double the number completed in 2025.

We believe acquiring land under our towers improves our margin and increases operational control of our assets, allowing us to deliver more value to the customer by meeting their needs more rapidly. Finally, we are also making progress strengthening our customer relationships and driving customer engagement. We resolved a long-standing commercial issue in the quarter with one of our largest customers that advances our strategic relationship and positions us for future growth opportunities. We acquired a residual economic interest on a subset of our tower sites and extended the customer's lease terms for those sites. We believe this agreement creates value for both parties by simplifying economics, increasing predictability, and limiting long-term churn risk. We believe this progress positions Crown Castle to capitalize on an increasingly supportive long-term backdrop for wireless communications infrastructure.

Mobile data demand, one of the clearest indicators of demand for our infrastructure, continues to grow at a healthy pace and is showing no signs of stopping with the emergence of AI-enabled applications, physical AI, and the acceleration of data-only wireless devices. We are also seeing continued investment in spectrum by our customers and others in the wireless industry. Over the past year, carriers and other wireless operators have committed significant capital to acquire spectrum assets, including AT&T's acquisition of 3.45 gigahertz and 600 MHz spectrum, Verizon's acquisition of AWS3 licenses, and SpaceX's acquisition of AWS4, H Block, and 800 MHz spectrum. These transactions demonstrate the commitments of the wireless industry to aggressively invest and to secure spectrum resources needed to support future terrestrial wireless network growth.

Notably, as part of its 800 MHz spectrum acquisition, SpaceX said it aims to, quote, "Become the first network operator to deploy both satellite and terrestrial spectrum." We believe SpaceX's mobile network ambitions could provide an additional catalyst in two ways. First, to invest directly by leasing towers to build their previously announced terrestrial network. Second, as a catalyst for network operators to achieve investment in their mobile networks to enhance performance and coverage against new entrants in the wireless marketplace. Looking ahead, we expect the FCC to auction approximately 800 MHz of spectrum, consistent with Chairman Carr's efforts to advance spectrum policy and maintain U.S. leadership in telecommunications. This includes approximately 160 MHz of upper C-band spectrum expected to be auctioned by July 2027.

Historically, new spectrum deployment has been an important driver of network investment, and we believe the industry spectrum pipeline remains supportive of long-term infrastructure demand. We continue to see momentum in edge compute infrastructure as demand for storage and compute continues to accelerate, while many large data center deployments face multi-year construction and power delivery delays. Crown Castle now has 100-plus edge sites deployed and several concurrent trials underway. While initial results appear promising, we continue to evaluate whether these edge solutions will scale. Crown Castle is positioned well to serve this demand in a capital-efficient manner through its nationwide network of tower sites, each with existing power and broadband connectivity, and can provide select distributed move-in ready locations. Our talented and dedicated teammates continue to play a critical role in our progress transforming the business, and we are seeing rising levels of engagement with our clear and focused strategy.

We are committed to investing in their continued development through additional training, individual development plans, and training in the cost-effective use of AI. In conclusion, over the past year, we have taken decisive steps to simplify the business, strengthen our operating model, and build the right leadership team. This progress allowed us to increase our full year 2026 guidance and positions us to capitalize on the sector tailwinds and opportunities. We believe our pure-play U.S. tower strategy, investment-grade balance sheet, and capital allocation framework positions Crown Castle to maximize long-term shareholder value. With that, I'll turn it over to Sunit to walk us through the details of the quarter.

Thank you, Chris, and good afternoon, everyone. We continue to execute on our strategy towards becoming a best-in-class U.S. tower operator in the third quarter, positioning us to increase our full year 2026 guidance. Starting on page 3, third quarter organic growth, excluding the impact of Sprint cancellations and DISH terminations, was 3.5%, or $35 million. Third-quarter organic growth increases to 3.8% if DISH revenues are excluded from prior year site rental billings. This growth was more than offset at site rental revenues by $5 million of Sprint cancellations, $61 million of DISH terminations, and a $17 million decrease in non-cash straight-line revenues and amortization of prepaid rent. Third quarter services margin was $15 million, which we expect to increase in the fourth quarter.

Turning to page 4, we are increasing our full year 2026 outlook by $20 million for site rental revenues, $25 million for Adjusted EBITDA, and $5 million for AFFO to reflect, first, a $20 million increase in straight-line revenues related to contractual term extensions as a result of the agreement Chris highlighted earlier. Second, a $5 million decrease in site rental cost of operations as we continue to drive efficiencies and increase our ground lease buyout activity. Excluding the impacts of the transaction, full year 2026 Adjusted EBITDA and AFFO are each increasing $5 million. I would like to take a moment to further highlight our progress on driving cost savings.

Since issuing our original full year 2026 guidance in February, if you set aside the increases to our revenue and the decrease from our services contribution, we have increased full year 2026 Adjusted EBITDA by $20 million from run rate cost savings or approximately 50 basis points as a percent of our site rental revenues. On top of these improvements, we still expect to expand margins by more than 200 basis points by 2030 relative to 2026. Turning to page 5. Full year 2026 organic growth, excluding the impact of Sprint cancellations and DISH terminations, remains unchanged at $135 million, or 3.4% of the midpoint. Full year 2026 organic growth increases to 3.6% of the midpoint if DISH revenues are excluded from prior year site rental billings. We continue to expect 2026 to mark the low point for organic growth.