SBA Communications Corporation (SBAC): Business Model Canvas [Dec-2025 Updated]

You're digging into the engine room of SBA Communications Corporation (SBAC), and honestly, it's a classic infrastructure play: lock in long-term contracts and let the rent roll in. As a former head analyst, I can tell you this model thrives on high-leverage real estate, securing essential ground leases to power the 4G/5G buildout for major carriers like Verizon and T-Mobile. We're talking about a business projecting site leasing revenue between $2,568 and $2,578 million for 2025, all while managing significant debt-like the $120.2 million interest expense seen in Q3 2025-to fund the construction of up to 800 new sites this year. If you want to see exactly how this REIT structure translates into predictable cash flow and what the near-term risks are in managing that debt load against carrier demand, check out the full nine-block breakdown below.

SBA Communications Corporation (SBAC) - Canvas Business Model: Key Partnerships

You're looking at the core relationships that fuel SBA Communications Corporation's growth, the deals that lock in long-term revenue and secure future site development. These partnerships are the bedrock of their tower infrastructure business.

The relationship with Millicom International Cellular S.A. is a prime example of strategic asset acquisition combined with future development commitments. The initial agreement involved the sale and leaseback of approximately 7,000 towers across Central America for about US$975 million, plus an earn-out. This acquisition, which closed at an 11 times EBITDA multiple, significantly expanded SBA Communications Corporation's footprint.

The execution of the Millicom deal spanned multiple quarters in 2025:

• - In the first quarter of 2025, 321 sites closed for $58.0 million.
• - In the second quarter of 2025, an additional 4,323 sites closed for $562.9 million.
• - In the third quarter of 2025, 446 sites closed for $142.8 million.

This partnership also includes a significant build-to-suit (BTS) agreement, which is a commitment for future revenue. SBA Communications Corporation is set to build up to 800 new towers in 2025 under this arrangement, with roughly 500 of those earmarked for Central America. This BTS program projected discretionary capital expenditures near US$1.3 billion in 2025. Following these transactions, SBA Communications Corporation owned or operated 44,581 communication sites as of September 30, 2025.

The agreement with Verizon, announced in November 2025, is structured to provide the carrier with significant cost certainty, which directly supports their ongoing 4G and 5G network expansion. While the specific financial terms weren't disclosed, this new long-term deal reinforces SBA Communications Corporation's role as a critical infrastructure provider for one of its major clients. SBA Communications Corporation manages a portfolio exceeding 44,500 communications sites across the Americas and Africa as of late 2025.

Securing long-term site access from landlords through ground leases is managed via consistent capital deployment for land purchases and lease extensions. Here's a look at the recent cash spent on these activities:

The company also maintains relationships with major equipment vendors for tower construction and maintenance services, which supports the build-to-suit programs like the one with Millicom International Cellular S.A..

SBA Communications Corporation (SBAC) - Canvas Business Model: Key Activities

You're looking at the core engine of SBA Communications Corporation (SBAC) as of late 2025, which is all about securing, building, and managing the physical assets that carry wireless signals. The key activities here translate directly into their recurring revenue base.

Site leasing: securing long-term contracts with wireless carriers.

This is the bread and butter. SBA Communications Corporation locks in wireless carriers for long-term use of their towers, which generates the predictable, high-margin revenue stream. For the third quarter ending September 30, 2025, site leasing revenue hit $656.4 million. To put that in perspective, site leasing contributed 97.5% of the Company's total operating profit in Q3 2025. Domestic organic revenue growth on a gross basis for Q1 2025 was reported at 5.1%, while international organic recurring revenue growth was 1.7% net. The company secured a new long-term master-lease agreement with Verizon during the third quarter of 2025. The 2025 outlook included guidance for new leases and amendments of $35 million to $39 million domestically and $16 million to $18 million internationally.

Site development: building new towers, with up to 800 planned in 2025.

SBA Communications Corporation actively builds new towers, often under specific agreements with carriers, which is a key growth driver. The company entered a significant build-to-suit agreement with Millicom that anticipates up to 800 new build-to-suit (BTS) towers in 2025, which is their largest BTS count in over 20 years. About 500 of those planned builds are specifically for Central America. In the third quarter of 2025 alone, SBA Communications built 151 towers. The total expected discretionary cash capital expenditure for 2025, which includes new tower builds, augmentations, and acquisitions, is projected to be nearly $1.3 billion. As of September 30, 2025, SBA Communications Corporation owned or operated 44,581 communication sites globally.

Portfolio management: acquiring and integrating new towers, like the Millicom assets.

Acquisitions are critical for scaling the portfolio, especially in high-growth regions like Central America. The integration of the Millicom assets is a major 2025 activity. During the second quarter of 2025, SBA Communications Corporation acquired 4,323 sites from the Millicom transaction for total cash consideration of $562.9 million. In the third quarter, they closed on the remaining sites, acquiring another 446 sites from Millicom for $142.8 million. The total deal was for approximately 7,000 sites. As of August 4, 2025, approximately 2,500 sites related to the Millicom transaction remained under contract for about $391.0 million in cash. The company's total site count grew from 39,709 at the end of Q1 2025 to 44,065 by the end of Q2 2025 and finally to 44,581 by the end of Q3 2025.

Here's a quick look at the major portfolio movements through Q3 2025:

Strategic asset management: exiting subscale markets like the Philippines and Colombia.

SBA Communications Corporation is actively optimizing its footprint by exiting markets where it cannot achieve scale. This activity is framed as focusing attention on growing other key markets. The company completed the sale of its 169 towers in the Philippines on January 10, 2025. Following that, on February 20, 2025, an agreement was entered into to sell all of its assets held in Colombia, which totaled roughly 200 towers. More recently, the company completed the sale of its towers held in Canada on October 15, 2025, for CAD$446.0 million, involving 365 towers. Management stated that when the company is in a subscale position without a clear path to scale, it will look to exit. The impact of the Colombia sale on financial performance was expected to be immaterial.

SBA Communications Corporation (SBAC) - Canvas Business Model: Key Resources

You're looking at the core assets that make SBA Communications Corporation (SBAC) tick as of late 2025. These aren't just line items; they are the tangible and structural advantages underpinning their entire operation.

The Physical Footprint: Communication Sites

The most critical resource is the physical infrastructure itself. As of the third quarter of 2025, SBA Communications Corporation owned or operated 44,581 communication sites globally. This portfolio is spread across the Americas and Africa, giving them significant scale in key wireless markets. To give you a sense of the recent growth, this number was 44,065 at the end of Q2 2025, showing active acquisition and build activity during the quarter. This scale is what attracts the major tenants.

The portfolio breakdown as of September 30, 2025, looked like this:

Structural and Financial Foundation

Beyond the towers, the legal and financial structure is a key resource. SBA Communications Corporation operates under a Real Estate Investment Trust (REIT) tax structure. This status is vital because it generally allows the company to avoid corporate income tax provided it meets specific distribution requirements, effectively passing tax benefits through to shareholders.

Also central to the model are the long-term, non-cancellable tenant leases with built-in escalators. These contracts provide highly predictable, inflation-protected revenue streams, which is the bedrock of the REIT model. This stability supports the company's ability to carry and manage its debt load.

Here's a quick look at the balance sheet strength supporting this resource base as of September 30, 2025:

• Significant debt capacity supports ongoing capital deployment.
• Net Debt stood at $12.3 billion.
• Total Debt was $12.8 billion.
• Cash and cash equivalents on hand totaled $0.5 billion.
• The Net Debt to Annualized Adjusted EBITDA leverage ratio was 6.2x.

The revolver availability also backs this up; as of November 3, 2025, the company had $385 million outstanding under its $2 billion revolving credit facility, indicating substantial liquidity headroom for opportunistic growth or unexpected needs.

SBA Communications Corporation (SBAC) - Canvas Business Model: Value Propositions

You're looking at the core value SBA Communications Corporation (SBAC) delivers to its customers, the major mobile network operators (MNOs). It boils down to giving them the physical platform they need, right when they need it, so they can focus their capital on the radio gear and software.

Enabling rapid and cost-effective 4G/5G network deployment for carriers.

SBA Communications Corporation helps carriers move faster on their next-generation buildouts. Consider the state of 5G deployment as of September 2025: T-Mobile was largely complete, Verizon was about 70 percent finished, and AT&T was near 50 percent. This means significant build activity is still ongoing, especially for AT&T. SBA Communications supports this directly through its services business, which saw revenue increase by 81% in the third quarter of 2025 compared to the prior year period, driven mainly by construction projects focused on network expansion. Furthermore, the demand for adding tenants to existing structures-colocation-is high; more than half of SBA Communications Corporation's revenue now comes from colocation.

Providing a critical, high-quality, and geographically diverse infrastructure footprint.

The sheer scale of the asset base is a key value point. As of September 30, 2025, SBA Communications Corporation owned or operated 44,581 communication sites. This footprint isn't just large; it's strategically positioned. Of that total, 17,409 sites are in the United States and its territories, while 27,172 are international. This diversity helps MNOs manage their national and regional coverage gaps. The site leasing business remains the bedrock, contributing nearly 98% of the total segment operating profit for the nine months ending September 30, 2025.

Here's a quick look at some of the operational and financial scale underpinning these value propositions for the third quarter of 2025:

Offering network flexibility and long-term cost certainty to major MNOs.

By leasing space on SBA Communications Corporation's towers, carriers avoid the massive upfront capital expenditure and multi-year site acquisition headache. This offers long-term cost certainty, especially when paired with inflation-linked escalators built into many leases. A concrete example of securing long-term capacity is the new long-term master-lease agreement entered into with Verizon. On the financial side, SBA Communications Corporation is actively managing its balance sheet to enhance its offering; they revised their stated target leverage range to 6.0x to 7.0x Net Debt to LQA Adjusted EBITDA, aiming to transition into an investment-grade Company. That transition signals financial reliability, which translates to stable, long-term partnership terms for customers.

Facilitating network densification and expanded rural coverage.

The need for densification-adding more sites closer together to handle increased data traffic-is a direct driver of leasing activity. The company finished 2024 with its highest backlogs for both leasing and services, setting up momentum for 2025, specifically mentioning U.S. customer investment in mid-band spectrum deployment for Fixed Wireless Access and 5G coverage expansion, as well as general network densification and expanded rural coverage. The CFO noted that after initial 5G coverage is established, the next wave is more colos to handle traffic, as Fixed Wireless Access customers use 15 to 20 times more bandwidth than standard handset users. You're providing the essential real estate for this capacity upgrade.

Finance: draft 13-week cash view by Friday.

SBA Communications Corporation (SBAC) - Canvas Business Model: Customer Relationships

SBA Communications Corporation structures its customer relationships around deeply embedded, long-duration contracts with major wireless service providers, creating significant revenue stability.

• - Long-term master lease agreements (MLAs) with major carriers.

SBA Communications Corporation entered into a long-term master-lease agreement with Verizon in the third quarter of 2025. These MLAs provide the material terms and conditions that govern the lease or use of space across multiple sites. The fixed escalators embedded in U.S. contracts average approximately 3%. The leasing business, which contributed 97.5% of the Company's total operating profit in the third quarter of 2025, is anchored by these agreements.

• - Dedicated sales and service teams for high-touch account management.

The company's clientele includes major carriers such as AT&T, T-Mobile, and Verizon. The business model relies on a very concentrated customer base, where the top few mobile carriers generate most of the revenue in each market. The domestic site leasing revenues for the third quarter of 2025 were $470.3 million. The company is focused on securing opportunities by reaching out more to its customers.

Here's a quick look at the scale of the customer base and leasing activity as of late 2025:

• - High switching costs due to infrastructure co-location complexity.

The structure of the agreements and the physical nature of the assets create significant inertia for tenants. The new agreement with Verizon secures a framework that will drive significant cost certainty for Verizon's network expansion. The company's domestic organic revenue growth on a gross basis was 5.1% in 2024, while international organic recurring revenue growth was 1.7% net, with 6% churn reported in 2024. The leasing revenue growth is also supported by lease-up, which is estimated to be between 2% and 4% when carriers are aggressively spending.

SBA Communications Corporation (SBAC) - Canvas Business Model: Channels

You're looking at how SBA Communications Corporation (SBAC) gets its value proposition-tower space for wireless carriers-out to the market as of late 2025. It's a capital-intensive game, so the channels focus heavily on managing a massive physical asset base and deep carrier relationships.

The core channel is the physical infrastructure itself, which is managed through direct, high-touch relationships. The leasing teams are definitely the front line here, given that site leasing contributed 97.4% of the Company's total operating profit in the second quarter of 2025. The sales effort is geared toward securing long-term contracts, evidenced by the strong leasing backlogs reported.

The scale of the global network dictates the channel strategy. As of September 30, 2025, SBA Communications Corporation owned or operated 44,581 communication sites across its footprint. This physical presence is the product being sold.

Direct sales and leasing teams are managing these carrier relationships, which is how they realize revenue from the physical assets. The focus is on securing new colocations and amendments, which drove a significant increase in new domestic leasing business in early 2025. The company is also executing on a build-to-suit agreement with Millicom that anticipates up to 800 new tower builds in 2025. This is a direct sales channel activity.

For the operational side of the channel, SBA Communications Corporation is actively managing its portfolio through acquisitions and dispositions. In the third quarter of 2025 alone, they acquired 447 communication sites for $142.8 million in cash. Also, in October 2025, they closed on the sale of 365 towers in Canada for CAD$446 million. These activities directly affect the inventory available through the sales channels.

While the primary interaction is direct, the process is supported by digital tools. You can infer the use of online portals for site information and application submissions because the company noted that company-wide total of new colocations executed during Q2 2025 was the highest in nearly three years. This high volume of activity requires efficient processing, which online portals help facilitate. Furthermore, the company has a significant capital allocation program supporting shareholder returns through its channels, having spent $325 million on share repurchases through the first three quarters of 2025.

• - Direct sales teams manage carrier relationships, evidenced by a projected $35 million to $39 million in domestic new leasing revenue for 2025.
• - The global network includes 44,581 owned or operated sites as of September 30, 2025.
• - The company is executing on a build-to-suit agreement anticipating up to 800 new tower builds in 2025.

Finance: draft 13-week cash view by Friday.

SBA Communications Corporation (SBAC) - Canvas Business Model: Customer Segments

You're looking at the core of SBA Communications Corporation's (SBAC) business, which is essentially leasing space on its communication sites to wireless operators. The customer base is highly concentrated, which is typical for this infrastructure play, but it means you need to watch those top tenants closely. As of late 2025, the company operates a portfolio of 44,581 communication sites as of September 30, 2025.

The domestic market is dominated by the three major US wireless carriers. Their network build-outs, especially for 5G capacity, drive the leasing activity. Honestly, the health of SBA Communications Corporation is directly tied to the capital expenditure cycles of these three giants. Here's the quick math on their contribution to domestic site-leasing revenues for the third quarter of 2025:

What this estimate hides is the risk; the loss or significant reduction in spending by any one of these three could defintely impact the top line, given their combined weight is over 87% of domestic leasing revenue in Q3 2025. The full-year 2025 revenue forecast, which SBA Communications Corporation raised after Q3, sits between $2.81 billion and $2.83 billion.

International Mobile Network Operators (MNOs) represent the next layer of customer importance, especially following recent strategic acquisitions. SBA Communications Corporation continues to expand internationally, highlighted by the agreement to purchase over 7,000 sites from Millicom International Cellular S.A., which was estimated to close around September 1, 2025.

• - Brazil holds a significant portion of the international portfolio, representing approximately 30% of total towers as of the end of 2024.
• - Central America is viewed as a significant growth area following the Millicom acquisition.
• - The company also has operations in two markets in Africa.

The customer base also includes other wireless service providers and government entities, though they represent a smaller portion of the total leasing revenue compared to the major MNOs. These smaller tenants still contribute to the overall site density and provide diversification away from the primary three US carriers. The company owned or operated 44,581 sites as of September 30, 2025, meaning the non-top-three tenants occupy the remaining sites.

SBA Communications Corporation (SBAC) - Canvas Business Model: Cost Structure

You're looking at the core expenses that drive SBA Communications Corporation (SBAC)'s operations as of late 2025. These are the big drains on cash flow you need to track.

The interest expense on debt remains a major cost component, especially with elevated rates. For the third quarter of 2025, interest expenses rose 25.5% year over year, hitting $120.2 million.

Capital deployment is another massive cost center, split between growth and keeping the lights on. Discretionary capital expenditures, which cover things like new tower builds and acquisitions, are forecasted to be significant for the full year 2025, projected between $1.255 billion and $1.275 billion.

The necessary, non-negotiable spending is also substantial:

• Non-discretionary cash capital expenditures for the third quarter of 2025 totaled $14.4 million.
• The full-year 2025 forecast for these non-discretionary expenditures, which includes tower maintenance and general corporate costs, is projected to be between $53 million and $63 million.

Ground lease payments are embedded within the overall cost structure, often reflected in the non-discretionary spend or the Cost of Site Leasing line item. To give you a sense of the scale of operating costs related to site management, consider the following data points from recent periods:

For site management expenses specifically tied to the Tower Revenue Securities, an indirect subsidiary, SBA Network Management, Inc., is entitled to receive a management fee equal to 4.5% of the Borrowers' operating revenues for the immediately preceding calendar month. This fee structure directly impacts the operating costs associated with a portion of the asset base. The total operating expenses for the third quarter of 2025 were reported at $358.1 million.

SBA Communications Corporation (SBAC) - Canvas Business Model: Revenue Streams

You're looking at the core ways SBA Communications Corporation brings in money, which is heavily concentrated in long-term contracts for tower space. This structure gives the revenue a highly predictable, recurring nature.

The primary revenue source is site leasing revenue, which is projected to be between $2,568 million and $2,578 million for the full year 2025. For context, in the third quarter of 2025, site-leasing revenues alone hit $656.4 million, broken down into $470.3 million from domestic operations and $186.2 million from international sites. This leasing revenue is the bedrock of SBA Communications Corporation's financial stability.

The secondary, but still significant, stream comes from site development services revenue. For 2025, projections place this between $240 million and $250 million. This revenue is tied to construction and modification work for carriers, and the third quarter of 2025 showed a surge here, with site development revenues reaching $75.9 million, an 81% increase year over year, driven by network expansion construction projects.

A key component baked into the site leasing revenue is the contractual increase mechanism, often referred to as lease escalators. For U.S. contracts, these escalators typically run at about 3% annually. This provides a built-in, automatic growth rate for a large portion of the revenue base, separate from new leasing activity.

Here's a look at the key revenue components and related metrics as of late 2025:

You should also track the churn impact, as it directly offsets leasing revenue growth. For 2025, the Sprint-related churn is estimated to be between $50 million and $52 million in total. The non-Sprint related domestic annual churn is more stable, staying between 1% and 1.5% of domestic site leasing revenue.

The underlying growth from new leasing activity and escalators is evident in the quarterly performance:

• Domestic organic leasing revenue growth (Q3 2025 gross) was 5.3%.
• International organic leasing revenue growth (Q3 2025 constant currency gross) was 8.5%.
• The company declared a quarterly cash dividend of $1.11 per share for Q3/Q4 2025.
• The dividend payout ratio is approximately 35% of the midpoint of the full-year AFFO outlook.

Finance: draft 13-week cash view by Friday.