Earnings Results: • Delivered solid results in line with expectations for Q1 2024 • Site rental revenues grew 4.4% to $1,524 million • Net income was $333 million • Adjusted EBITDA grew 5% to $1,014 million • AFFO grew 4% to $785 million
Future Guidance: • Outlook for full year 2024 remains unchanged • Expect 6% growth in site rental revenues • Adjusted EBITDA expected to grow 5% • AFFO growth at midpoint expected to be 7% • Expect 6% tower organic billings growth and 6% growth from fiber solutions
The Q1 2024 earnings call highlighted Crown Castle’s solid results that were in line with expectations, despite some challenges. The company delivered site rental revenue growth of 4.4%, adjusted EBITDA growth of 5%, and AFFO growth of 4%. While there was an impact from Sprint cancellations and a decline in straight-line revenues, the underlying business continues to perform well.
Looking ahead, management reiterated their full year 2024 outlook, expecting 6% growth in site rental revenues, 5% adjusted EBITDA growth, and 7% AFFO growth at the midpoint. They anticipate 6% organic billings growth from towers and 6% from fiber solutions.
The call also focused on the ongoing strategic review of Crown Castle’s fiber business, with the Board evaluating various options to maximize shareholder value. The new CEO, Steven Moskowitz, expressed optimism about the company’s future prospects given the critical nature of its infrastructure assets and the strong demand backdrop for towers and small cells driven by 5G deployments.
While there are some near-term headwinds, management remains confident in the long-term growth opportunity as carriers continue investing in their networks. The tower business model is well-positioned to benefit from this, though the exact timing of the reacceleration in growth is difficult to predict.
Notable quotes: • “Our AFFO growth in the quarter was primarily driven by higher-than-expected organic growth in our tower business, partially offset by the anticipated impact of Sprint cancellations.” -Dan Schlanger, CFO • “I’m extremely optimistic about Crown Castle’s future because I believe we have the best assets in the U.S. and an unmatched ability to serve our customers’ need to continue to invest in their networks over the long-term.” -Steven Moskowitz, new CEO • “Based on my experience, I would say the vast majority of carrier decision-making on infrastructure spending is responding to their network capacity needs, coverage needs, quality of service needs, et cetera.” -Previous CEO on drivers of tower leasing activity