Crown Castle Inc Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Jonathan Atkin - RBC Capital Markets - Analyst : Two questions. It's been a very eventful year when it comes to kind of the executive range with Dan's movement now into the acting CEO seat and then soon that you're getting hired on. And I wonder if you could shed a little bit of light as to what happened since the last earnings call that led to this sort of sequence of events. And then secondly, you outlined kind of the strategy going forward around capital return to shareholders, US only. And within the context of that, any further thoughts relative to what we shared on the last call around build-to-suits or external growth through tuck-in M&A and so forth.

Question: Ric Prentiss - Raymond James & Associates - Analyst : Looking forward to working with you and seeing you. I want to start with one with some, if I could. Obviously, you've been on the Board of Crown for a while. What appeal to you? Or what kind of triggered your thoughts of, let's move from a board role to a CFO role? And what do you think you then bring to that role?

Question: Ric Prentiss - Raymond James & Associates - Analyst : And Dan, you mentioned a couple of times top priority, key focus, get the deal done. Walk us through kind of where you're at in the process at only announced shortly ago, but what are the difficulties of getting this deal over the finish line? Is it particular states or where are you at in the process, but obviously, key focus, what are the difficulties?

Question: Ric Prentiss - Raymond James & Associates - Analyst : Last one for me is, obviously, first quarter was pretty good. Very good. Had the $3 million backfilling intercompany primarily. You touched on a couple of things that might be positive or negative, but it seems like your confidence is well founded, should I say. Also, you just gave the guidance 1.5 months ago. But walk us through maybe what the pacing for new lease activity should look like in '25 and kind of how we from the outside should think about the ability or desire maybe at some point to say we can now adjust our guidance?

Question: Michael Rowlands - Citigroup - Analyst : And also welcome to Sunit. Two questions, if I could. First, just maybe going back to some of the comments on activity that you're just describing, can you frame a little bit in terms of what you're seeing on the colo side of the equation versus the amendment side of the equation? And within that context, just any changes in the way the carrier conversations have been progressing? And then second, on the last call, you talked about the tail of churn from the merger, the Sprint merger that's going to start in '26 and continue for a few years. And just curious if there is any creative ways to try to remediate that or try to created an additional comprehensive relationship where you could try to address that and kind of clean it up in a way that's good for you and good for the customer. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 30, 2025 / 9:00PM, CCI.N - Q1 2025 Crown Castle Inc Earnings Call

Question: James Schneider - Goldman Sachs - Analyst : Maybe just to ask the management question in a different way. Dan, can you maybe share with us the Board's thinking about sort of what they may be looking for and as CEO this time around with a more streamlined company rather than what they were post what they're looking for back 18 months ago when they were considering Stephen's candidacy?

Question: Alexander Waters - Bank of America - Analyst : Welcome Sunit. Maybe first for you, Suni. Could you maybe just talk about some of the kind of strategic priorities you have coming in as CFO and kind of your preference between leverage reductions, programmatic or opportunistic buybacks? And then secondly, could you guys maybe just talk a little bit about the services side of the business, both your competitors highlighted that they're seeing pretty good demand from customers on that?

Question: Benjamin Swinburne - Morgan Stanley - Analyst : Dan, you touched on it a little bit earlier, but I just wanted to come back to the expense side of the business this year. Very strong margin quarter in Q1, a couple of hundred basis points, I think, ahead of expectations. And I think if we were to annualize the first quarter EBITDA, you'd be ahead of the full year range. Can you talk a little bit about sort of the phasing of costs through the year? And maybe it's simply the straight-line revenue putting downward pressure on EBITDA at rest of the year, but any color would be appreciated. And then I don't think this was discussed last call on the fiber small cell sale. But any tax implications either tax -- cash tax liabilities tied to the sale or any other tax implications for the company as you close the pending sale next year that we should be thinking about?

Question: Nick Del Deo - MoffettNathanson LLC - Analyst : Dan, Sunit congratulations to both on your appointments. I think you had initiated or we're studying a number of operational improvement or efficiency projects under Stephen, kind of with the expectation that, that work might pick up when the strategic review had wrapped up. I was wondering if you could update us on like what's underway and in motion versus things that might be on pause either for Sunit or the new CEO to kind of review them and have an opportunity to apply their stamp.

Question: Richard Shao - JPMorgan Chase & Co - Analyst : I just wanted to follow up on the core new leasing. Was this from a particular carrier? Or is it across the board? And then can we get a sense of maybe what your backlog of business looks like for the rest of the year from your carrier customers.

Question: Batya Levi - UBS Group - Analyst : Great to talk to you, Sunit again. And I had a few questions. First on the SG&A side. Can you provide some color on the guidelines you used to allocate SG&A between segments? And to the event that there is some more allocated back to the tower business, is there a rough percentage that we could think about? And as you make more progress on cost savings, should we expect that the annual AFFO growth that you provided that range $250 million to $370 million could be potentially narrowed or updated as you pull forward some of those savings? And maybe just a quick one on the regulatory front. Should we expect that the approval process will be a holistic review of both small cell and fiber businesses and close at the same time. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 30, 2025 / 9:00PM, CCI.N - Q1 2025 Crown Castle Inc Earnings Call

Question: Jonathan Chaplin - New Street Research - Analyst : Sunit, great to have you back in the fold in the industry. Quick question. Just following up on Batya's question on the shared costs that stay in SG&A that have the potential to come out. Can you give us sort of any quantification around the magnitude of opportunity there? And then on the share repurchase program, the $3 billion that follows the closing of the deal, could you give us some context for the timing of that? Is it going to be sort of programmatic spit out over a number of quarters? Or will it be an accelerated share repurchase program sort of executed with the bank that will be reflected in the share count instantly.

Question: Jonathan Chaplin - New Street Research - Analyst : Great. And sorry, Dan, can you just remind me what your target leverage will be following the deal following, yes.

Question: Brandon Nispel - KeyBanc Capital Markets - Analyst : I wanted to ask about sort of new bookings that you signed during the quarter, not necessarily the billings that you report. But could you help us understand how tower leasing bookings were during the quarter? Are they up year-over-year? Are they up quarter-over-quarter? Some color on that would be helpful given some of your peers have called that out.

Question: Brendan Lynch - Barclays - Analyst : Dan, you alluded to the transaction closing all at once. I'm curious if there's some sort of regulatory hiccup in one or two states, what would that actually mean for the deal? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 30, 2025 / 9:00PM, CCI.N - Q1 2025 Crown Castle Inc Earnings Call

Question: Brendan Lynch - Barclays - Analyst : Okay. That's fair. And then just one on your MLAs. Can you quantify, even if broadly, how much of the growth you are reporting is stemming from MLAs versus demand that is above and beyond what the carriers have already contracted?

Question: Brendan Lynch - Barclays - Analyst : And if the carriers were able or are interested in increasing the pace of their deployment, would that generally fall within the MLAs that you have? Or would that be outside and kind of increase the mix of extra MLA contribution?