Here's our initial take on American Tower's (AMT -4.24%) second-quarter financial report.
Key Metrics
| Metric | Q2 2024 | Q2 2025 | Change | vs. Expectations |
|---|---|---|---|---|
| Total revenue | $2.54 billion | $2.63 billion | +3% | Beat |
| Net income per share | $1.92 | $0.78 | -59% | Missed |
| Adjusted funds from operations per share | $2.79 | $2.60 | -7% | n/a |
| Total tenant billings growth | 5.6% | 5.2% | -0.4 pp | n/a |
A Better Outlook for American Tower
American Tower provides important infrastructure assets for just about every technological innovation that's happening right now, so it's not surprising to see the company faring well. Total revenue was up 3% on a 1% rise in property revenue, and American Tower saw a 5% rise in total tenant billings based on higher demand for its services.
Foreign currency fluctuations weighed on American Tower's international results, which led to a sharp decline in earnings under generally accepted accounting principles. However, funds from operations (FFO), a metric that's generally more commonly accepted for judging real estate investment trusts, held up much better. This figure actually rose year over year if you incorporate some extraordinary items beyond American Tower's usual definition of adjusted FFO.
CEO Steven Vondran pointed to several factors that led to the gains. Midband upgrades in the U.S. and greater densification of wireless networks helped American Tower's domestic business. In addition, the CEO pointed to the CoreSite subsidiary's performance, which was strong as demand for artificial intelligence interconnections resulted in double-digit-percentage sales gains there.
Most importantly, American Tower boosted its projections for the full 2025 year. The company now sees total property revenue in a range of $10.135 billion to $10.285 billion, up from its previous range of $9.97 billion to $10.12 billion. Adjusted FFO of between $10.46 and $10.65 per share would be better than the $10.35 to $10.54 per share that American Tower expected three months ago.
Immediate Market Reaction
American Tower investors didn't act particularly surprised by the results, and some of the extra adjustments that the communications REIT made didn't seem to convince everyone about how well the business is doing. Accordingly, shares were down more than 2% an hour after the initial release in premarket trading Tuesday morning.
Overall, though, American Tower shares have done well recently, climbing 22% so far in 2025. Incremental gains aren't unusual for this industry, and while investors can't expect the stratospheric moonshots that they see in companies more directly exposed to AI, American Tower does benefit from the collective level of AI-related activity.
What to Watch
Investors in REITs like American Tower often pay close attention to dividend distributions, and American Tower continued to boost how much it's paying its shareholders during the second quarter. Total distributions of $1.70 per share were 4.9% higher than in the year-ago quarter.
Yet the communications tower business can be capital intensive, and it'll be important to watch how American Tower juggles commitments for capital expenditures to improve its asset base. In addition, the REIT has used acquisitions to boost the size of its network, and how American Tower decides to balance all of those demands on its cash could play a key role in how quickly it grows from here.
