American Tower Corporation ($AMT)

All right. Well, good morning, everyone. Thanks for joining us for the second day of the MoffettNathanson Media, Internet & Communications Conference. I'm Nick Del Deo, and I'm thrilled to be joined by Rod Smith, EVP and CFO of American Tower.

Good morning, everyone. Thanks for joining so early in the morning. Yes.

Thanks for joining us, Rod. Appreciate it.

Welcome. Happy to be here.

Yes. So listen, I want to start with an interesting comment that Steve made on your earnings call a couple of weeks ago. He said, "I believe that American Tower is on its strongest strategic footing in at least a decade." It's a pretty strong statement. So I wanted to know if you could expand on what he means by that. And more importantly, what it means for the company and for its investors prospectively.

Yes, it's a great question, great way to start this morning. And I would say 2 things on the outset. One is the genesis and the basis for that comment is, number one, American Tower has never been stronger, and I'll explain what that means to us. And that's also combined with just a great set of opportunities. And you take that strength and put it up against the opportunities, and we do think it is amongst, if not the most, compelling strategic framework that we've had at American Tower. So when I highlight the fact that American Tower is incredibly strong at the moment, it really comes in a few categories. Number one, we spent several years strengthening the company, improving the balance sheet strength, reducing the interest rate risk by reducing our exposure to floating rate debt. And in the last couple of years, we've had 2 notch upgrades on our credit rating. We're up to BBB+. That's a pretty strong investment-grade balance sheet, certainly the strongest amongst all of the tower companies. We've also paired that strength with improvements in the quality of our earnings and the mix of our cash flow. So you've all heard us talk about the fact that we are focused on increasing exposure within our cash flows from the highest quality economies in the world, the developed markets. And at the same time, reducing our exposure in our cash flows from emerging markets. Some of the places where you see more volatility where we've experienced more volatility, we've made great progress along those lines, and we have our exposure to emerging markets now down below 25%, moving to 20% and we will continue to bring that lower. So the quality of our earnings is much better, much stable or much more durable, and we think that is important. We've also improved our margins by a few hundred basis points over the last few years. We've streamlined operations around the globe. We've created a global Chief Operating Officer, so we can unify processes and have standards around the globe and take the best part of our company, which is our operational ability in the U.S. that we've been honing for 25, 30 years and really accelerating rolling that operational expertise out across the globe. That's helping us reduce costs and improve margins. So we have an incredibly strong business. We have an incredibly strong balance sheet. And that is great, but the thing that makes it even greater is it's up against a fabulous set of opportunities. When you look at the kind of the go-forward path here across our portfolio, we've got a great portfolio in the U.S. We've got 5G rolling out. 5G applications are on the way. The U.S. business is more stable than I would say it has been in decades with the Sprint churn behind us, the DISH churn now behind us. The cash flows in the U.S. are incredibly stable. So we feel really good about that. We have that great tower business. 6G is on the way, and we see a stable mid-single-digit recurring revenue growth in our U.S. business, which is the anchor for the whole business. And then we combine that in the U.S. with CoreSite, a fabulous set of interconnected rich data center assets with cloud on-ramps, hundreds of networks represented within those facilities that we have. And this is at a time when compute power across enterprise customers and others is just accelerating. And we're seeing that in our pipeline. We're seeing that in our growth rates. We've had a record new business across that platform. We're seeing double-digit economic growth over the last couple of years, year-over-year. And with the demand that we're seeing, we don't expect that to change. And AI workloads and interesting is just coming. It's just beginning to really get through our pipeline and get into our facilities. So you look at that high-quality assets, you look at the strength of our balance sheet and our operational business. The combination of towers and data centers with the backdrop of demand. It's an incredibly compelling story, it is the way we see it. And we've been working over the last several years to position ourselves for what we see unfolding right now.

Great overview. Touches on a lot of things, and I want to dig into more. I guess to paraphrase almost, it sounds like $1 of earnings is worth more than $1 of earnings in the past, and you've got a better ability to prosecute the opportunities ahead.

Yes, I think that's right. And I would just emphasize again the quality of earnings. That is important to us. We take actionable steps to improve that. We have -- you've seen it. selling India was an effort to improve our quality of earnings. What quality of earnings means to us is the higher quality, the more durable it is, the more predictable it is, the more repetitive it will be that we can count on, not just the recurring some of the cash flow, but the growth as well with fewer and smaller potential disruptions.

Great. Great. Well, let's dig into the growth outlook. Probably the most common question I get from clients, not surprisingly relates to the growth outlook for the U.S. tower business. There are several different facets to it, whether it's spectrum auctions, the industry structure, 6G, AI and so on. So historically, the spectrum auctions have been a stimulant for leasing. There are some auctions on the horizon, think most notably, the upper C-band middle of next year and you've got several hundred megawatts megahertz in the years that follow for 6G. So I guess with respect to C-band, what's your current understanding as to what's going to have to be deployed on the towers to make that work and the degree to which carriers may or may not be able to reuse C-band equipment that they have today.

Yes. I would start there by maybe taking a step deeper and going to level deeper. The reason the industry needs additional spectrum, which it does. You hear all the wireless carriers talk about the need for additional spectrum. And that need is coming quickly in the short term, in the next few years. There is an allocation of spectrum pushed in The Big Beautiful Bill. So it does look like Spectrum will be coming. But that's not the whole story. The real story is why does the industry need that spectrum. The industry needs additional spectrum because of the growth in mobile data consumption across the network. It continues to grow at a rapid pace, 30% to 35% a year. That means every few years, it doubles. The amount of bandwidth going through wireless networks is doubling. And that means that the amount of capacity built into the wireless networks also need to double over the next several years to keep up with that growth in mobile data consumption. The way the wireless carriers keep up with that is by expanding capacity within the network. They can do that by bringing in new spectrum and increasing the amount of spectrum so that you have more capacity available or you have to reuse the spectrum you already have more frequently and break it down and separate it and either way, whether you have new spectrum coming in, like will probably be happening or if you don't get the spectrum and you just have to reuse your existing spectrum more frequently, it's going to require additional equipment on the cell site. It's going to require additional base radios, additional radio heads up on the towers, cables and lines going up and down the towers and additional antennas and maybe new antennas as well. Some of the spectrum, certainly it can be -- it can reuse some of the existing equipment up there, but much of it is going to require new equipment. But -- it really is -- the story really is beyond the spectrum, it's about the growth in mobile data consumption. And as that data consumption growth continues to increase, there needs to be more equipment on the towers, whether there's new spectrum or not. That is what underpins our growth going forward and what makes us feel very comfortable and confident in the U.S. position in our towers and our ability to grow in that mid-single digits year-over-year reliably. And I would say we've been doing that over the last several years but we've also added some event-driven headwinds, very specific event-driven headwinds like Sprint churning off their network because they were bought by T-Mobile, DISH selling their spectrum and coming off of that -- those are event-driven onetime items. The underlying run rate business from the 3 big carriers and others has been very consistent in delivering that mid-single-digit revenue growth.

As I think about some of the spectrum bands coming to market in the coming years that the NTIA is looking at, very high -- or I shouldn't say very high, but much higher frequency bands than what's been deployed today. I think all else equal, people would generally say that higher frequency means you need a denser cell grid to support it. On the flip side, somebody might argue that maybe it's so high that it's uneconomic to deploy in some areas. How do you shake out on that front? .

Yes. I mean there's no question that we are already into the higher bands of spectrum. And when you get through 5G and into 6G, it's absolutely likely that we'll be into higher band spectrum, high C-band spectrum. And the higher the spectrum band, the benefits to the networks are that they're -- It's a wider band and there's more capacity. More advanced applications require more capacity. AI-driven applications are going to require more capacity. So it is that higher spectrum is a benefit to the network in getting these more advanced applications to work properly. With that said, the higher band spectrum and the more capacity, the shorter the reach, it doesn't propagate as far. So if you look at a 600 megahertz design ring and then you overlay a higher band, high C-band spectrum over that, it's not going to reach nearly the coverage zone that the 600 does. It will be much smaller. So what that means is if you want that higher band reach capacity benefits and service benefits like lower latency, faster speed, just that higher throughput, you're going to need to densify the network. You're going to have more transmission points where in 600 you have 1, in a higher band spectrum you might need 2 or even 3 over time. That's where carriers will be co-locating on existing towers and are currently on to reuse the spectrum to have more transmission points within their network or they'll build additional sites to densify it. But I do think that's where the industry is headed is these new applications, these higher, faster, bigger services that require more capacity definitely are coming, and it's going to require more transmission points, which is really good for the tower sector for us, in particular, I'll just remind folks that across our 43 towers, our largest customers are on something roughly equivalent to half of our towers, which means there's roughly half of our towers are available for all of the 3 big carriers to co-locate on a tower they're not already on, and that could be the first wave of densification could be increasing colocation. Then the next phase may be building new towers, which we -- as we pursue really leaning into the U.S. market, both on the tower side and data center side, deploying more capital in the U.S. is something we're interested in doing and building towers for the carriers is something that we would be interested in doing.

Okay. Great. In your opening remarks, you talked about having Sprint churn and DISH churn sort of in the past kind of speaks to consolidation in the industry and going down to a few financially healthier carriers that are more stable. There's one argument to be made that in that sort of scenario, they can afford to invest more in their networks over time and then it's beneficial to towers. On the other hand, one could argue that more carriers there are, there's more redundant deployments, more inefficiency in the network, less coordination in the past, and that's -- that dampens leasing activity relative to what it might have been. How do you think about those puts and takes as we think about the longer-term trajectory relative to the past?

I think trying to identify in the industry getting to the optimal number of carriers and having them be healthy fully competitive balanced market share, that's the best backdrop for us. In the U.S., that looks like it's 3 carriers. That could be an argument that a 4-carrier backdrop in the U.S. could also make sense and could be stable. And if DISH continue to pursue the build-out and really focused on getting subscribers, that could have been the fourth network. That is certainly possible. But we've seen in the U.S. and around the globe, when you have 5, 6, even more carriers within the marketplace, it has proven to be unsustainable over time. And in that environment, yes, you can get some lease up, but as things consolidate in, you may have a little bit of churn. But typically, the acquiring company needs the spectrum. They keep the subscribers. They even need the coverage in the cell sites. There could be some churn. So it could very well be that consolidation doesn't drive significant churn. But on the other side, with something like DISH, it could drive a lot of churn. And with Sprint, there was obviously a lot of churn. We've seen some churn and consolidation down in Brazil. We think now in some of our biggest markets, the backdrop is healthier today than it's been in a long time. The U.S. with 3 financially healthy carriers in the U.S. all putting billions of dollars into the networks on an annual basis. We see at least in our customer base in Europe, anchored by Telefonica, again, high-quality economies, Telefonica is investing in the network. We're a big part of that. It's a very stable backdrop. Even when you get out into Brazil in a place in Brazil that -- they've moved through consolidation. We now have a large market with 3 carriers, pretty equally distributed market share, healthy competition and we're right in the center of it. And that looks like it could be a constructive market going forward. With that said, we've got an investment there. We have assets there. Our plan is to sit and support the carriers and see how that network does over time, see how that currency does over time, not jumping in and increasing capital. But now letting the capital we've already invested there play out and really -- and watch the investment.

Okay. Great. So 6G. That's something that folks are starting to talk about. Still a number of years away, but I'm sure that you have teams at AMT kind of thinking about how that's going to play out. you're probably having preliminary discussions with the carriers, I'd imagine. So I guess what attributes of 6G do you find most intriguing from a leasing perspective?

Yes. there's no question you can't stop the technology and the progress that has made the networks today operate so much differently than they did a decade ago or more. If you think of the wireless networks pre-iPhone versus today, it's night and day what people do on their mobile devices and just how much traffic goes on the mobile devices. If you rewind even 10, 15, 20 years ago, very few people would have imagined how much and what kind of services can be done on an iPhone and a mobile device. My sense is that's what the next 10 and 15 years are going to be like, which is whatever these networks evolve to look like over time, it's going to be different than what people expect. It's going to be more exciting. It's going to be more impressive. The services are going to be different, and they will likely require lots of bandwidth, very low latency, really quick reaction time. And the one thing that I think people are really coalescing around in terms of 6G is that it will run on higher-band spectrum. The networks will need to be dense. The applications will be bandwidth intensive and that's all good for tower companies in terms of needing more equipment up on the networks. Today, the networks are primarily designed for download speeds for people downloading data onto their phone and doing it relatively quickly. And there isn't nearly as much capacity or throughput on the uplink. It just hasn't been a function of the network. 5G and into 6G that uplink is going to be just as important as the downlink. So the networks have to be fundamentally reengineered and redesigned so that there's symmetry on the uplink and the downlink for some of these more interactive 5G and 6G services to work properly. That's capital investment, that takes additional equipment, and I think that's going to be pretty exciting. I'm not going to guess at what 6G applications are going to look like because I know I'm going to be wrong. But I'm pretty sure they're going to be more exciting than any of us could imagine. And they're going to require lots of bandwidth. And the networks will need to continue to be strengthened, densified, more equipment to handle the amount of capacity that they're going to be asked to put through the networks on a daily basis.

So I was at the Tower Show ConnectX last week and a common theme that I picked up was the idea that 6G plus AI would be, maybe killer apps is the wrong term, but something that would help to stimulate leasing and traffic demand on the networks. Is that something that you guys are anticipating?

Yes, I think so. I mean when you think about 6G and the fact that networks will likely be dense or the uplink needs to be strengthened, it's probably going to also require and be the catalyst that really pushes the edge forward that brings compute power closer to the end users, closer to where the wireless-based radios are, and that's where our towers and our data centers perfectly position us to play a meaningful role in a 6G environment, not just putting additional equipment up on our towers, but also benefiting from the interconnection and the inferencing, the AI entrancing that we now see coming into the CoreSite facilities. And we're at the very early stages. Our sense is that, that's just going to continue to ramp and we're going to continue to see very healthy pipelines in our CoreSite facility as well as seeing acceleration in the amount of equipment that goes up on our towers over time as we get through 5G and 6G. We see these new applications hitting. And then there's this ecosystem in the middle that is becoming more of a reality. More of the players are talking about it. The carriers are talking about it. The chip companies are talking about it. And that is driving and pushing cloud on ramps closer to the end-user, getting compute power closer to the end user with that inferencing can happen. So to benefit from the high capacity and the low latency in the 6G wireless networks, you're going to have that capacity, that compute capacity and access to your information that might be up in the cloud, you want that closer to the base radios to again reduce transport cost, but also reduce latency and give you that faster reaction time. So you don't want the benefits of the higher spectrum on the wireless networks to be lost when you get into the data centers. So pushing that out closer to that power is going to be key. And we're really well positioned to help the industry get there.

Okay. So that actually ties into the next topic I want to talk about, which is mobile Edge compute or Edge data centers. Yes, there's a lot of enthusiasm for that several years ago and it didn't quite play out. It sounds like there's more enthusiasm across the industry today. We heard that on everybody's Q1 earnings calls. I heard that at the tower show last week. And you touched on it a little bit, what gives you the confidence that this time around with 6G and what we're seeing is going to be different than what was anticipated a few years ago where it kind of petered out a bit, it didn't quite play out as expected?

Yes. When we bought CoreSite, which was several years ago, 1 of the things we really like: in addition to just the high-quality differentiated set of assets, we do think it's a premier set of data center assets in the U.S., and we wanted to own it. We also thought that pairing that with our towers in the U.S. that we would be the perfect partner to develop the Edge, and we saw that coming even years ago. It has been happening just slower than we thought. Maybe you could just say much slower than we thought. But we have seen progress in that pursuit. More of the carriers today, more of the tech companies and the chip manufacturers are all talking about the Edge. They're all formulating their plans. We're in the midst of many of those discussions with people. So I would say, as we sit here today, we are highly confident that the Edge is coming, that it has to come because it's a necessary component of the networks to make everything work well into the future. Then the real question is, are we really differentiated? What is our value proposition with our towers and our interconnection-rich, cloud on-ramp, kind of dense geographically dispersed set of assets up against all of our tower assets, bringing those together, does that put us in a good position to fill that need for the industry, and that has yet to be seen. We'll continue to work through that. But we're at the table. We're having the discussions with lots of different parties. I'm highly confident that the Edge is definitely coming. We'll figure out what the business model is and how we best support the industry and our shareholders in what role we potentially play there. And as we do that, we'll continue to be disciplined. And it will develop, we potentially would be right in the middle of it. And to the extent that it doesn't develop as quickly as we thought or if for whatever reason, we don't play as big of a role, we still have a great separate assets that are performing exceptionally well. And one of the keys there is the 2 assets, even though they look different they benefit and their revenues and their economics are really driven by the same demand. It's data consumption across networks. And we understand that really well. That helps us run both of the assets well. It helps us make capital allocation decisions and figure out where and when to invest because we know that ecosystem and the drivers around data and data consumption across mobile networks and through traditional landline networks as well.

Maybe it's too soon to tell, but do you envision this playing out such that you might have say, a small data center, a single small data center in a metro area, akin to with the trial when rallying with North Carolina? Or do you imagine it getting denser than that where you might have multiple facilities in a given metro area?

I think everything is possible, and I don't believe it's 1 size fits all. I think the way that it is likely to roll out is that there will be a continuous kind of connectivity from mobile devices right through to radios and into cloud on-ramps, you're likely to see as the Edge develops our core site facilities expand into other metros, moving closer to the end users. And in some places where there is high population density and the most acute examples of high bandwidth going through the networks, you could see relatively small data centers pushed out right to the very edge. And in other places, you could see larger centers kind of move back a little bit. And over time, everything probably fills in. So I think it's a little bit of all of the above.

Okay. Okay. Let's pivot to satellite. If there's a single topic I've gotten more questions on this here than any other, it's satellite. So questions from investors that whether it might substitute for capacity in rural areas, whether it's for a terrestrial customer layers, whether it could be something more, whether there might be a play on the part of someone to try to build out and become the new fourth player? So maybe you could talk a bit about that topic, how you're thinking about risks, opportunities. And to the extent that there was news this morning about the carriers talking about putting together a joint venture to attack this, your initial thoughts on that?

Yes. I think it's a great technology. We have an investment in AST Mobile. We have a board seat on that publicly traded company. So we understand it well. We understand the technology well as a firm. And we track all the details of where that technology has been and where it's going. And we think it's an exciting technology. It's a complementary technology to the terrestrial networks. It is a great way to extend coverage to hard-to-reach places and to very hard to reach places as well. So I think it's a service to humanity to be able to have satellite coverage everywhere for people who need it and want it. The advancements around direct to devices is really good, compelling. But it's complementary. And what that means is it is not a competitive threat to terrestrial wireless networks. And therefore, in our opinion, it's not a threat to the towers that support those terrestrial networks. And it really comes down to physics and capacity and speeds. The satellites do a really good job of reaching into hard-to-cover areas. It is not an equivalent service in terms of the capacity or the speeds that you get in the terrestrial network. So -- and when I say capacity, it's not just on an individual call doesn't have the capacity. The satellite arrays, they do not have the spectrum or the capacity to cover a population like the U.S. or any of the major cities or suburban areas. It's not possible. There are limitations to how many subscribers and what can be going through the satellite arrays, and it is a -- it is just a fraction of what the terrestrial networks do. So it is a great complement. It gets into hard-to-reach areas and it extends the current terrestrial networks. In no way does it compete with what the terrestrial networks provide and what the terrestrial networks do. And then even when you get into individual phone calls, the amount of capacity and the bandwidth and the speeds, you'll be able to get that a level on terrestrial networks that you don't get on satellite networks. So those 5G, 6G services require the terrestrial networks.

I'm sure you've done a lot of work internally tower-by-tower to determine how many sites you may own that could conceivably face a risk from satellite, if you were to look at a few years with technology improvements and whatnot more spectrum. Are you willing to put a number on that or dimension how small that is?

Yes. I mean it's -- probably not putting a number on it. What I would say is our towers are primarily in suburban areas where people live, and then they commute into the cities, and we cover the roadways. It extends out a little bit beyond where the traditional suburbs may be. And -- but I would also highlight the fact that the cost of a megabit running through a network is for the carriers is much less if they're running it through their own network, including on towers that we own, they're parts of their network than it is to be paying on a minute-per-use to satellite providers or even on an MVNO in a lot of cases. So what we've seen is the carriers would share networks on an MVNO basis in more rural areas. And then as their consumption got to a point where there was a tipping point, then they would turn on their own network and extend their coverage. That's primarily where our towers are when you think about the Edge of the network, they're unlikely to be displaced by satellites because that would just be transferring minutes of use to a higher cost, and you have already got the network in place. With that said, satellites may prevent some sites from being built in rural areas. And that really will be a nice complement to the wireless carriers, and it will allow them free up kind of mind and resources to really focus on their networks, the core of their network, that's where we provide the service. So we think that's a good thing for us.

Okay. Great. There's some news a few days ago regarding DISH. The FCC and their orders approving the spectrum transfers from EchoStar to SpaceX into AT&T said that EchoStar would have to set up a trust funded with $2.4 billion to help cover claims of nonpayment, whatnot. I know you're not going to show your hand here, but interested in your general thoughts about the structure that's been proposed and whether that might be beneficial for you guys?

Yes. Just a few brief comments. And of course, there's litigation involved and it's hard to really comment too much on government agency actions. But I would say 2 things. One is we have a contract with DISH, it goes out over many years. And we have filed litigation to force DISH to honor their commitments within our contract. That pursuit continues regardless of spectrum transfer and any other FCC actions. And I would say the only limiting factor in terms of what we could potentially be awarded there is the rights we have within the contract and the lawsuit plays out and what the court system decides. It won't be limited by the amount of escrow and that sort of thing. We have a contract. We feel very good about our rights. There is certain amounts owed to us, and we will pursue every aspect of that fully. And with that said, on the other side, separately, the FCC did approve the spectrum transfer. I think approving it is good. Not having that spectrum in limbo for a long time is better for, I think, everyone. So if the spectrum is not going to be built out anymore from DISH perspective and AT&T and others want to get their hands on it. When they get it, they will deploy it. So the sooner they get it, the faster they'll deploy it and the quicker that brings us to a new revenue event potentially as and when they deploy it. So I think approving that is a good thing from our perspective given where everything sits today. And then on the flip side, that escrow, it basically just gives a limited kind of safety net to any judgments that vendors may get against DISH, that if they have trouble collecting on those judgments, there is some money in third -- in an escrow that you could try to go after. And we don't know exactly how that would be adjudicated, what the rules will be on that, how it will be administered, but it's there. So that is better than if it's not there. But in no way does it limit what we would expect the court system to do in terms of helping us enforce the rights that we have within the contract.

Okay. Makes sense. Capital allocation has been a big priority for you guys in recent years. Like you said, focusing on higher-quality markets, more predictable returns and so on. In your remarks earlier, you said you were hopeful that you could do more construction of U.S. towers. I know historically, at least last several years, I think the sort of terms and conditions you're being offered on new construction did not meet your threshold. What -- how confident or what's your sense that, that is changing such that you feel like you could participate in more construction?

Yes. I'm not sure that it is changing dramatically, but the willingness on our end to deploy capital in the U.S. is certainly there. And as always, we will be disciplined. We do bring some things to bear that other smaller developers don't, the scale of our reach and our ability to build lots of towers quickly, time to market; the value proposition, I think, could be compelling. In this environment where interest rates are a little bit higher, smaller developers may not have as easy access to capital. So someone that has a large build plan that requires lots of capital, the options are fewer today than they might have been 5 years ago. And that is something that we'll kind of wait and see. We -- in terms of our focus on increasing exposure in the more developed markets, reducing it in emerging markets, we've been able to rotate our capital deployments to the best options for our shareholders long term in our view. And that means today, we're allocating the vast majority of our discretionary CapEx is going into developed markets, primarily U.S. and Europe. And much of that is going into data centers in the U.S. So we continue to deploy $1.5 billion to $2 billion annually kind of opportunistically. And within that number, keeping that number relatively consistent, we've increased our annual capital investments in CoreSite, our data center platform from $200 million a year up to $800 million a year. And that may continue to be elevated because the demand is just so strong. And when I say demand, it is showing up just in our pipeline. It's giving us pricing power. It's fueling and driving double-digit economic growth within that business. And that doesn't appear to be slowing and maybe even accelerating with AI coming in. So we've rotated capital -- and we've been able to dramatically increase the investments in CoreSite without dramatically increasing our overall capital programs or stressing the balance sheet. We've also been below 5x now back within our stated range, and we bought back over $500 million of American Tower stock in the last couple of quarters. And again, combined with accelerated investments in CoreSite and keeping our leverage download, everything on the balance sheet is really working where we're targeting where we put the capital. We're maintaining that high-quality balance sheet and that is helping us with our quality of earnings because we're increasing the amount of cash flows we're getting in the U.S. and in U.S. dollars and now from CoreSite. And that puts us in a really strong position to durably drive industry-leading AFFO per share growth. And we're targeting that in the mid- to upper mid-single-digit growth rates in the U.S. That's what we've been focused on for a few years and putting together the pieces that would allow us to do that, not just once or once in a while, but repeatedly, that's the quality of earnings. And now that we're moving through DISH, we've gotten through Sprint, we've got India out of the way, we've grown into a higher interest rate environment with a much stronger balance sheet and longer-term financing, we're in a really good position to begin to deliver beyond this year once we get through the DISH churn that mid-single-digit AFFO per share growth, upper mid-single-digit AFFO per share growth. And we believe that, that will be an industry-leading growth rate.

That ties in perfectly to the last question I wanted to ask, which is kind of the growth algorithm for the stock perspective. So like you said, mid- to high single-digit AFFO per share growth over time. I think the yield on the stock today is around 4%. It's high single, low double-digit returns together, which is pretty interesting, given the risk profile of the business and the quality assets. So I guess one, in your mind, is that a fair way to think about it? And two, if you set aside rates and FX, which are out of your control, what are the swing factors that you think are most likely to influence that outlook one way or another? .

Yes, it's a great question. So I would say, putting aside FX and interest rates. And with those 2 things, yes, I think putting them aside is fine. We talk about it in that way as well. But I would also just highlight we're in a better position today than we were 5 years ago relative to FX and interest rates. They -- we have reduced the ability of FX and interest rates to move our numbers materially from where we were 4 or 5 years ago by reducing floating rate debt, extending our maturities on the interest rate side. And from an FX perspective, we've increased the amount of the percentage of our AFFO, our EBITDA and AFFO that comes in U.S. dollars. And we've reduced the amount that comes in foreign currency. So we are in a better position, a more stable position, a higher quality position when it comes to FX and interest rates. If you put those aside, we expect our U.S. tower business to grow on a revenue basis mid-single digits beyond this year when we get through the DISH churn. Excluding the DISH churn this year, would be in the mid-4%, 4.5%. So we have been in that range or better, 5% are around that over the last couple of years. We think that's durable and can continue. So a 5% revenue growth on the tower side, Europe has been growing higher than that by 100, 200 basis points. We expect that can continue. You look down into -- Africa is growing upper single digits, almost double digits now, and it has been on an FX-neutral basis. So we do think that will continue. Brazil has been lower than the normal rate of growth because of the consolidation churn primarily driven in Brazil and a few other places with Telefonica exiting some markets. We will be beyond the kind of the trough this year. And next year, that will be returning to more normalized growth. And we expect Latin America to grow 100, a couple of hundred basis points faster than the U.S. And then in the data center business, that's growing double-digit economic growth. So you put all that together, you've got an upper single-digit revenue growth, you drop that down to AFFO. Managing expenses, we've continued to drive margin expansion and control costs, and that gives you the ability on an AFFO, AFFO per share to grow upper single digits. That's what we expect to deliver on average over time. Doesn't mean every year you won't put on average over time. Yes, the things that can move that. Certainly, the AI inferencing that's beginning to hit data centers, they could be upside there, certainly. In the U.S., the expectation that is underpinning our outlook here is just business as usual. If there is a fourth player, that could be very interesting if there's any government investments in networks in the U.S., which they're have been in the past, and there could be in the future, that could be upside and interesting as well. Growth in mobile data consumption, AI applications hitting, maybe densification accelerates, if you see increases in that growth in mobile data consumption, that could be a catalyst for additional investment by the carriers and growth as well. So I think we're in a really good position to deliver mid-single-digit -- upper mid-single-digit AFFO per share growth. As things sit today, our risks have been reduced dramatically over the last several years. So quality of earnings is higher. We're really well positioned to deliver that growth. And there are a number of catalysts that could accelerate that .

Well, that's great. Unfortunately, we're out of time, Ron, but I appreciate you being here and help us walk through the store.

Thank you for having me.