American Tower (AMT +1.60%), a leading global real estate investment trust (REIT) focused on communications infrastructure, released its second-quarter 2025 results on July 29, 2025. The highlights were a significant beat on non-GAAP EPS at $2.60 per share versus analyst estimates of $1.67, and GAAP revenue of $2,627 million (up 3.2%), also ahead of expectations. Although the company posted healthy increases in operating revenues and property growth, net income (GAAP) fell 58.1% to $381 million, largely due to foreign currency (FX) losses. Overall, the quarter showed stable property operations, robust U.S. and data center business, and an improved outlook for core metrics, yet currency headwinds and challenges in some international regions pressed headline profits.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $2.60 | $1.67 | $2.79 | (6.8%) |
| Revenue (GAAP) | $2,627 million | $2,593.7 million | $2,545 million | 3.2% |
| Adjusted EBITDA | $1,752 million | $1,721 million | 1.8% | |
| AFFO attributable to AMT common stockholders, as adjusted | $1,218 million | $1,188 million | 2.6% | |
| Free Cash Flow | $969 million | $1,013 million | 0.0% |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Business Overview and Strategic Priorities
American Tower operates, acquires, and develops communications real estate, such as cell towers and data centers, in the U.S. and internationally. Its main business is leasing space on communications sites to wireless service providers and enterprises. This property operations segment consistently contributes about 98% of revenue for 2022, 2023, and 2024, anchored in long-term contracts with built-in rent escalators and high renewal rates.
Recently, American Tower has centered its strategy around several focus areas: stabilizing and growing property operations, optimizing its international portfolio, supporting new technology adoption (notably 5G and artificial intelligence infrastructure), maintaining disciplined capital allocation, and managing regulatory risks. Success depends on growing recurring revenues, raising site utilization, strengthening core margins, and smartly allocating capital to higher-return opportunities while keeping debt in check.
Quarter Highlights: Solid Core Growth Amid FX Headwinds
Revenue growth was driven by the steady performance of property operations, which made up 98% of total revenue. Property revenue rose 1.2% over the prior year, bolstered by a 5.2% increase in total tenant billings and strong U.S. carrier amendment activity. Organic tenant billings—a measure of true recurring growth from rent escalations and lease renewals—grew 4.7%, while U.S. and Canada segment tenant billings increased 3.8%. Services revenue was $99.5 million, up from $47.4 million in Q2 2024, supporting one of the highest quarters of U.S. Services revenue contributions on record, reflecting heightened demand for site upgrades and 5G enablement. Data center property revenue grew 13.5%, with continued high-single-digit to double-digit cross-connect growth, fueled by demand for AI-ready interconnection solutions.
Margins remained stable in the U.S. and Canada at 80%, while property gross margin across the company was 74.7%. The pace of overall property revenue growth was moderated by a $45.9 million decrease in straight-line revenue compared to Q2 2024—an accounting adjustment reflecting changes in expected future lease payments. This adjustment distorts headline revenue growth but does not affect the underlying cash generated by leases.
Internationally, results were mixed. Latin America property revenue fell 13.2% year over year, while Africa & Asia-Pacific and Europe both achieved solid double-digit revenue growth (12.4% and 14.5%, respectively). Management noted continued regional volatility and significant foreign exchange losses—about $484 million—mainly impacting reported net income (GAAP) but not affecting cash results.
Data centers, offered under the CoreSite brand, saw robust demand. Data center property revenue rose 13.5%, with growth attributed to additional capacity and continuing tenant demand for cloud and AI infrastructure. The company also acquired the DE1 data center facility in Denver to expand long-term capacity and strengthen its interconnection ecosystem.
Capital expenditures were $313 million, down 4.6% from a year ago, mainly prioritizing developed markets and strategic data center investments. The company reported net leverage at 5.1x, slightly above target but improved versus recent quarters, and liquidity stood at $10.5 billion as of June 30, 2025. American Tower continues to keep a $2 billion share buyback authorization in place, although there were no reported buybacks in the quarter.
Dividend distributions continued to increase, with the quarterly payout rising 4.9% to $1.70 per share, in line with the real estate investment trust (REIT) requirement to return earnings to shareholders. Free cash flow, at $969 million, was down 4.1% from the prior-year period. Adjusted EBITDA was $1,752 million, up 1.8% year over year.
Looking Ahead: Raised Guidance, Continued Risks
For FY2025, management raised guidance for several key operating metrics. Total property revenue is now forecast at $10,135 million to $10,285 million for FY2025 (midpoint growth rate of 2.8% year over year). Adjusted EBITDA is expected to grow in 2025, and as-adjusted AFFO per share is forecast in a range of $10.46 to $10.65 for the full year 2025 (midpoint growth rate of 6.0% year over year, adjusting for the sale of India assets). Organic tenant billings growth is projected at about 4.3% in the U.S. and more than 6% internationally for the full year 2025. However, net income (GAAP) full year 2025 guidance was lowered by $400 million at the midpoint due to further expected FX losses.
Key risks remain front and center for the rest of 2025. Currency volatility, especially in emerging markets, continues to impact reported earnings. The churn from exiting customers—especially in Latin America—may weigh on organic tenant billings growth (a non-GAAP metric) despite regional investments in 5G and network upgrades. Adjusted operating and capital metrics remain the main indicators for tracking the company's true performance, as accounting and currency swings can obscure day-to-day business trends.
The quarterly dividend was raised 4.9% to $1.70 per share.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
