American Tower (AMT) Q3 2026 earnings review
American Tower data centers grow fast, but US towers stall
American Tower's US data centers and share buybacks are lifting per-share cash flow while its core tower leasing slows down. The wireless real estate group grew property revenue 5% from a year ago (7% by our math excluding non-cash lease accounting), as a 17% jump in data center sales offset flat underlying billings on US and Canadian towers. Chief executive Steve Vondran raised the full-year per-share cash flow outlook slightly, though by our math the plan points to property revenue growth slowing to 2% in the fourth quarter.
| Property revenue (excluding straight-line accounting) | +6.5% reported property revenue: +4.5% to $2,734M |
|---|---|
| Tower billings growth on sites owned a year ago | +1.1% +5.0% a year ago (U.S. & Canada: 0.0%) |
| Cash flow per share (AFFO) | $2.87 +3.2% from a year ago |
| Full-year AFFO per share outlook | Raised $0.02 middle of the range: $11.10 (+3.2%) |
⚖️ Verdict: ⚪ Neutral
The story is unchanged because the third full-year outlook raise came from share buybacks rather than stronger tower profits. Management raised its property revenue plan by $55 million on data center strength and spent $315 million on buybacks, yet it kept full-year operating cash flow (Adjusted EBITDA) flat as site expenses rose and customer cancellations weighed on North America and Africa.
The question now is whether 2026 is truly a one-year dip caused by DISH Network lease cancellations or the start of slower wireless carrier spending. If the slowdown is only DISH, underlying tower billings growth will rebound toward 5% next year once those cancellations drop out of the comparison; if carriers are pulling back, weak site-preparation services and overseas churn will keep growth low. The initial 2027 outlook in February will settle it.
🐂 Bull Case
Data Centers Carry the Property Revenue Raise
CoreSite, the US data center business of wireless tower owner American Tower, continues to outpace the rest of the group. Chief executive Steve Vondran said "continued outperformance from CoreSite" helped lift the full-year plan. Data center property revenue jumped 17.4% from a year ago to $313 million, while cash revenue in the segment rose 16.3%.
Because demand for cloud and artificial intelligence connections stayed strong, the real estate trust raised its full-year data center revenue forecast by $13 million at the middle of the range, to $1,223 million. That represents 16.1% annual growth, up from the 14.9% pace forecasted in July. Still, data centers brought in only 11.4% of property revenue this quarter, so they cannot offset a tower slowdown alone.
What to watch: new data center development spending in the 2027 plan, which arrives with fourth-quarter results. A rise above this year's unchanged $695 million budget would show that new capacity is turning into faster revenue growth.
Buybacks Step Up and Lift Per-Share Cash Flow
Stock buybacks had nearly stopped in the second quarter at $19 million, raising doubts about how management would use its cash. In the third quarter, the real estate group spent $315 million to buy back 1.8 million shares. It then bought another 0.4 million shares for $68 million through October 20, and the board added $2.0 billion to the buyback plan on October 23.
Those purchases shrank the diluted share count by 0.7% from a year ago and did all the work in the latest profit forecast. American Tower kept its full-year outlook for adjusted funds from operations (AFFO, a measure of recurring real estate cash flow) unchanged at the middle of the range, but raised AFFO per share by $0.02 "primarily due to capital allocation decisions".
What to watch: fourth-quarter share repurchases in the full-year report. Continued buying against the $3.1 billion now available would lift 2027 per-share cash flow growth even if tower leasing stays slow.
Canadian Sale Continues Shift to Core Markets
"The actions we have taken to simplify the portfolio and enhance financial flexibility are creating a stronger foundation for durable, long-term growth," Vondran said. After selling its towers in the Philippines and Bangladesh in June, the infrastructure owner agreed to sell its Canadian subsidiaries for 288 million Canadian dollars (about $202 million), with the deal set to close in the fourth quarter.
Alongside the sale, American Tower trimmed its full-year tower construction plan to between 1,300 and 1,900 new sites, down from 1,700 to 2,300 sites in July. That cuts full-year capital spending by $40 million at the middle of the range and leaves more cash for data centers and share buybacks.
What to watch: the closing of the Canadian sale in the fourth quarter and how much revenue it removes from the 2027 North American outlook. A clean exit keeps capital focused on higher-margin US towers and data centers.
Positives this quarter didn't test
Two standing growth drivers got no new numbers in the earnings release and depend on the conference call or quarterly filing.
- Multi-year wireless catalysts: carrier spending on new radio spectrum and artificial intelligence network traffic is not detailed in the release; the 2027 outlook in February will test it.
- Shift to full tower leases in the US: new equipment additions on US towers brought in $25 million against $41 million a year ago, and the release does not split full leases from smaller equipment upgrades.
🐻 Bear Case
Cancellations Stopped U.S. Tower Billings Growth
"We delivered another solid quarter, supported by consistent leasing demand across our global tower portfolio and continued outperformance from CoreSite," Vondran said. In its largest segment, however, underlying tower revenue stopped growing. Billings on US and Canadian sites owned for at least a year were flat, down from 0.7% growth in the second quarter and 3.9% a year ago.
- U.S. & Canada lease cancellations: $63 million drag, more than double the $28 million a year ago
- U.S. & Canada new equipment and leases: $25 million added, down from $41 million a year ago
- U.S. & Canada annual price escalators: $38 million added, compared with $37 million a year ago
Because cancellations of $63 million wiped out both new equipment additions and annual price increases, total segment property revenue fell 3.3% to $1,275 million. A $30 million non-cash accounting deduction for straight-line lease revenue also weighed on the top line, though underlying property revenue still rose 6.5% company-wide by our math when excluding straight-line swings.
What to watch: the initial 2027 outlook for US and Canadian tenant billings in February. If new equipment additions stay near $25 million a quarter after the DISH cancellation wave laps, North American growth will miss the company's mid-single-digit target.
Property Costs and Interest Eat Into Margins
American Tower aims to lift its tower cash profit margin by 2 to 3 percentage points by 2030, and it raised its full-year property revenue outlook by $55 million at the middle of the range. Yet it left its full-year Adjusted EBITDA (operating profit before depreciation and stock compensation) outlook unchanged at $7,275.5 million.
Higher site costs and interest payments absorbed the extra revenue. Property operating expenses — the cost of land rent, fuel and site maintenance — rose 1.4 percentage points of property revenue from a year ago, pulling the property gross margin down from 74.9% to 73.5%. Consolidated Adjusted EBITDA margin fell 1.0 percentage point to 65.8%. Meanwhile, cash interest expense climbed 5.8% from a year ago to $353.1 million after the group issued $1.6 billion of new debt in September to pay off 1.45% notes and credit lines.
What to watch: fourth-quarter Adjusted EBITDA margin, which the full-year outlook implies will slip compared with a year ago. Another drop would leave the company behind the pace needed for its 2030 margin goal.
Services Revenue Halved as Overseas Churn Grew
Outside North America, carrier cancellations and slower network preparation weighed on growth. Services revenue — fees for zoning, permitting and structural checks before carriers hang antennas — dropped 49.2% from a year ago to $51.4 million, down from $61.3 million in the second quarter. Services operating profit fell from $41 million a year ago to $13 million.
Because site preparation work normally leads new tower leases by two to six months, the drop suggests US carrier activity remains muted. At the same time, Latin American billings on sites owned a year ago shrank 2.1% on $24 million of cancellations, and Africa and Asia-Pacific underlying billings growth slowed from 10.6% in the second quarter to 8.2% as cancellations rose from $2 million a year ago to $9 million.
What to watch: fourth-quarter services revenue against the $180.3 million booked across the first nine months. A reading below $60 million would miss the $245 million full-year target discussed last quarter and point to slow early-2027 leasing.
Risks this quarter didn't answer
Five standing concerns could not be checked from the earnings release alone and await the quarterly filing or conference call.
- AT&T Mexico rent dispute: the release gives no update on the August arbitration hearing or bad-debt reserves; the quarterly filing's legal note will show them.
- DISH bankruptcy claims: no update on recovery or equipment removal from towers; the filing's legal note will cover any progress.
- Data center pre-leasing and delivery: megawatts under construction and signed leases live in the supplemental package and call remarks.
- Currency share of the outlook raise: the release gives exchange-rate assumptions, while the exact dollar boost lives in the supplemental tables.
- Satellite competition: whether executives defend towers against direct-to-phone satellites can only be checked in the call transcript.
👓 Other Themes
Tax-Rate Jump and Equity Losses Hit Net Income
Reported net income fell 14.4% from a year ago to $781 million, and American Tower cut its full-year net income outlook by $30 million at the middle of the range "primarily due to unrealized losses for equity securities". The quarter included $71.5 million of paper losses on stock investments against a $10.9 million gain a year ago, while income tax expense jumped from $37.4 million to $117.6 million. Excluding the equity investment swings, net income fell 5.5% by our math.
💲 Other KPIs
Unearned revenue — rent customers have paid in advance for future periods — fell 8.0% from $437.6 million a year ago and dropped from $497.0 million in the second quarter. After rising 18.4% from a year ago last quarter, this advance-payment buffer is now shrinking.
Net debt — total borrowings minus cash — rose 1.2% from a year ago and increased from $35.43 billion in June as the real estate trust funded share buybacks. Net debt stood at 4.9 times annualized Adjusted EBITDA for a fourth consecutive quarter, just inside management's 5.0 times ceiling.
Free cash flow was nearly unchanged, up 0.2% from a year ago after jumping 19.6% in the second quarter. Operating cash flow fell 4.6% to $1,393 million on higher interest and tax payments, which the US company offset by cutting capital spending 14.6% to $407 million.
🔮 Guidance
Raised. The middle of the range moved up $55 million to 5.0% annual growth, helped by data centers. It is the third raise this year, and each has been smaller than the last: +$145M, +$110M, +$55M. By our math, the plan leaves fourth-quarter property revenue growth at 2.3% from a year ago, down from 4.5% in the third quarter.
Unchanged. American Tower narrowed the range by $15 million and kept the middle at $7,275.5 million, or 2.0% growth for the year. By our math, that leaves fourth-quarter Adjusted EBITDA down 1.0% from a year ago at $1,800 million, slower than the 0.9% increase recorded in the third quarter.
Unchanged. Management tightened the range while holding the middle at $5,175.5 million, which represents 2.6% growth for the full year. Higher data center profit was offset by slightly higher capital improvement spending and noncontrolling interest adjustments.
Raised. The middle of the range rose by $0.015 (reported as $0.02 by the company) to $11.10, or 3.2% growth, because buybacks lowered the expected full-year share count from 467.0 million to 466.2 million. It is the third raise this year: +$0.12, +$0.10, +$0.015. By our math, the outlook leaves fourth-quarter AFFO per share at $2.68, up 1.9% from a year ago.
Cut. The middle of the range dropped by $29.5 million (stated as $30 million) to $3,280.5 million, though it still points to 24.8% growth over 2025 because last year carried heavy foreign currency losses. Third-quarter paper losses on equity investments drove the reduction.
Cut. The middle of the range fell by $29.5 million to $3,210.5 million, or 26.9% growth for the year, for the same reason: third-quarter unrealized losses on equity securities.
Cut. The group lowered its spending plan by $40 million at the middle of the range to $1,820 million as it reduced planned global tower builds by 400 sites. By our math, after spending $1,196 million in the first nine months, the plan leaves $624 million for the fourth quarter.
❓ Key Questions
What happened at the August AT&T Mexico arbitration hearing?
About $300 million of annual tenant rent was in dispute going into the August 2026 hearing. Investors need to know whether a ruling has arrived and if bad-debt reserves are still reducing Latin American revenue.
Why did U.S. new leasing revenue slow to $25 million?
Colocations and amendments in the US and Canada added $25 million this quarter, down from $41 million a year ago, while site preparation services halved. Management needs to explain whether carrier spending is slowing ahead of 2027.
How much of CoreSite's under-construction capacity is pre-leased?
Data centers drove the entire property revenue outlook raise, yet American Tower kept its 2026 data center construction budget fixed at $695 million. Disclosing signed leases on the 36 megawatts being built would show how much 2027 growth is locked in.
Why did the $55 million revenue raise add zero EBITDA?
Management raised full-year property revenue by $55 million at the middle of the range but kept Adjusted EBITDA flat. The call needs to break down how much of that gap came from higher land and power costs versus currency or accounting shifts.