On August 1, 2022, SBA Communications Corporation (SBAC) reported financial results for the second quarter of 2022. Revenues for the quarter that ended June 30, 2022 stood at $652.0 million, up 13.3 percent from $575.5 million in the prior year period. Domestic site leasing revenue amounted to $442.1 million and international site leasing revenue was $138.1 million in the second quarter of 2022.
Domestic cash site leasing revenue increased 5.8 percent from $408.3 million in the second quarter of 2021 to $431.8 million in the second quarter of 2022. International cash site leasing revenue increased 30.4 percent (or 27.1 percent on a constant currency basis) from $106.3 million in the second quarter of 2021 to $138.6 million in the second quarter of 2022. In the second quarter of 2022, site development revenue totaled $71.8 million, up 39.5 percent from $51.4 million in the prior year period.
Operating profit from site leasing in the second quarter of 2022 was $468.7 million, up 9.3 percent from the prior year period. Site leasing accounted for 96.4 percent of the company’s operating profit in the second quarter of 2022. Operating profit for domestic site leasing increased 6.0 percent from the prior year period, up to $376.3 million, while the international site leasing segment operating profit was $92.4 million, up 25.1 percent from the prior period.
Tower Cash Flow of $459.6 million in the second quarter of 2022 was broken down into Domestic Tower Cash Flow of $366.5 million and International Tower Cash Flow of $93.1 million. Domestic Tower Cash Flow increased 5.9% from the previous year and International Tower Cash Flow increased 23.7%, or 20.4% on a constant currency basis. Tower Cash Flow Margin was 80.6% in the second quarter of 2022, down from 81.9% in the previous year.
Net income in the second quarter of 2022 was $69.2 million, or $0.64 per share, and included a $43.1 million charge, net of taxes, related to the remeasurement of debt in foreign subsidiaries’ currencies. Furthermore, net income in the second quarter of 2021 was $152.7 million, or $1.37 per share, and included a $73.6 million gain, net of taxes, on the remeasurement of loans in foreign subsidiaries’ currencies.
The company reported adjusted earnings before interest, taxes, depreciation, and amortization (Adjusted EBITDA) of $437.8 million in the second quarter of 2022, a 9.4 percent increase from the same period last year. The company’s Adjusted EBITDA Margin was 68.2 percent in the second quarter of 2022 compared with 70.7 percent in the prior year period.
“Our second-quarter performance was very strong,” stated Jeffrey Stoops, President and CEO. “Wireless carrier activity was, and remains, robust across most of our markets. In both leasing and services, we are extremely busy fulfilling the needs and requests of our customers as they continue to pursue a high level of network investment. Against this demand, we continue to execute very well. We achieved another record for U.S. services revenue in the quarter.”
SBAC expects the demand for services to remain strong into 2023 and perhaps beyond, given the size and scope of their customers’ 5G deployment plans.
With respect to capital allocation, SBAC remains very disciplined about maintaining target leverage levels and opportunistic about allocating capital to portfolio growth or stock repurchases. Consistent with that approach, they are acquiring approximately 2,600 additional towers in Brazil on terms believed to be attractive and will be immediately accretive upon closing. The acquired towers will be complementary to existing towers in Brazil. and SBAC expects to integrate them easily and without incurring ongoing material incremental or SG&A expense.
As a result of these positive results and prospects, the company’s board of directors declared a quarterly cash dividend of $0.71 per share of the company’s Class A Common Stock. The distribution will be paid on September 20, 2022, to shareholders of record as of August 25, 2022.
SBAC is confident that this strong showing will continue and is increasing their full-year outlook for 2022 across all key financial metrics.
