Crown Castle Inc Q2 2025 Earnings Call Transcript

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

Question: Michael Rollins - Citibank Cameroon SA - Analyst : Thanks, and good afternoon. I'm curious to ask about the pro forma post divestiture Crown Castle. So in the past, I think you talked about generating and you referenced it, I think earlier, enough AFFO per share, so the dividend payout at 4.25% would be 75% to 80%. And then there could be a second leg after that in terms of efficiencies beyond just the general organic growth of the business. So curious, as you've been focusing more on the go-forward Crown strategy, and efficiencies, what you're learning about the size of opportunity in that second leg of maybe how much more incremental efficiency you can generate and the speed at which you could get to the first leg and the second leg once the deal closes. Thanks.

Question: Michael Rollins - Citibank Cameroon SA - Analyst : Thanks.

Question: Michael Funk - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Yeah, thank you for the question. Good evening everyone. So Sunit, maybe a question for you, if I could. Going back to the post-close structure, you've talked a lot with the allocation of expense between the standalone business versus the divested business. Where are the most questions on overlapping costs left to evaluate and deciding the final breakdown of expense between the divested, and then the core tower business? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 23, 2025 / 9:30PM, CCI.N - Q2 2025 Crown Castle Inc Earnings Call

Question: Michael Funk - Bofa Merrill Lynch Asset Holdings Inc - Analyst : But are there other areas like maintenance, for example, there's still some questions and allocate that cost between the two businesses, or is it more the overlapping costs, business support IT accounting, things of that nature that you still question?

Question: Michael Funk - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Okay, one more quick one, if I could please. I'm thinking about capital allocation priorities, how should we think about programmatic versus opportunistic buybacks?

Question: Michael Funk - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Great, thank you both for the time.

Question: Ric Prentiss - Raymond James & Associates, Inc - Analyst : Thanks. Good afternoon, everybody on a busy day. First, our thoughts are with everybody in Texas. That was a very difficult time over the July 4. So if everybody on the team and families made it okay.

Question: Ric Prentiss - Raymond James & Associates, Inc - Analyst : First question I've got, Dan, you mentioned that something you've already been achieving has been shorter cycle times. Where are we at right now? What are you guys hitting and what kind of cycle times are you achieving that's helping results?

Question: Ric Prentiss - Raymond James & Associates, Inc - Analyst : Okay. I think you also mentioned on the deal closing, you're still looking at the first half. You got some state levels that are making good progress are approved, DOJ. Is there anything with the FCC? And of course, we've been watching T-Mobile UScellular, Paramount Skydance, a lot of this DEI discussions or need for a letter sometimes comes out there. But is there any FCC requirement? And where are you guys at as far as any kind of DEI issues?

Question: Ric Prentiss - Raymond James & Associates, Inc - Analyst : Right. And last one for me is you laid out your three objectives and what you're working on -- good progress on all of them. Maybe an update on is the board actively searching for a new CEO? Are they waiting for the deal to close? Because it means or seems like the process is going well. But what is the update kind of on a CEO search? And could there be any changes in capital allocation or stock buyback plans if there was a change at the C level?

Question: Ric Prentiss - Raymond James & Associates, Inc - Analyst : Great. Thanks guys. And again, our thoughts are with everybody in Texas.

Question: Benjamin Swinburne - Morgan Stanley - Analyst : Thanks, good afternoon. I guess two questions. One kind of bigger picture. I know it's early, Dan, but I was wondering if you had any updated thoughts on how gen AI or AI could drive incremental traffic by your customers and therefore incremental tower revenue, particularly as we see inferencing as a bigger and bigger part of the AI use cases. And then second, I know it's a smaller part of the business, but service gross margins are coming in better. You guys -- that's part of the guide raise. What -- can you talk a little bit about what's happening there? How much of that might be kind of structural or what changes you've made to help drive that and how we should think about the service margin opportunity going forward? Thank you.

Question: Benjamin Swinburne - Morgan Stanley - Analyst : Thank you so much.

Question: Jonathan Atkin - Rbc Capital Markets - Analyst : Thanks. Just a couple from my side. I wondered if you're noticing anything different around carrier activity with respect to doing their own greenfield builds. I think one of them kind of referenced in an elevated pace doing their own bills rather than perhaps commissioning build-to-suits from third parties. Any observations on that? And then with regard to just private market M&A activity in the US, anything that you're seeing in terms of multiples.

Question: Jonathan Atkin - Rbc Capital Markets - Analyst : No, go ahead. I have a quick third one, to go ahead and address the M&A.

Question: Jonathan Atkin - Rbc Capital Markets - Analyst : Thanks. You mentioned operations and execution in both the prepared remarks and then in response to Ric's question. On ground lease purchases, the pace of it, anything around whether that could increase in terms of outright purchases of lands or lease extensions, anything different going forward than what we've seen over the last couple of quarters?

Question: Jonathan Atkin - Rbc Capital Markets - Analyst : Thank you.

Question: Ari Klein - BMO Capital Markets - Analyst : Thanks. Dan, you mentioned capacity additions. Curious if that suggests you're seeing an uptick in color activity. And maybe you can talk to the color versus amendment mix and how that might be changing? And then maybe separately on EBITDA, you've had two quarters of outperformance at the start of the year that amounts to more than the amount that guide was raised. And if we simply annualize the first half of the year, it would get above the high end of the range. So just curious if you can provide some color on the moving parts and maybe what's been sustainable cost savings versus seasonality or timing. Thanks.

Question: Ari Klein - BMO Capital Markets - Analyst : Thank you.

Question: Batya Levi - UBS AG - Analyst : Great, thank you. Can you remind us your exposure to with USM and as the remaining deal terms with the company? And do you have a sense of the overlap with T-Mobile. I think they just suggested that they will take on more towers from USM and how that could potentially impact you? Thank you.

Question: Batya Levi - UBS AG - Analyst : Sure. The exposure to USM and maybe the remaining deal terms with the company. And I believe T-Mobile is looking to acquire more towers from USM and how could that impact you?

Question: Batya Levi - UBS AG - Analyst : Thank you.

Question: Brendan Lynch - Barclays Services Corp - Analyst : Great, thanks for taking my questions. Wanted to follow up about allocating cost between continuing and discontinuing ops. It sounds like the default is to keep expenses in continuing ops so it's clear that it can be moved over. So should we expect that more costs are going to be moved over each quarter until the deal closes. Looks like you did this with $15 million of stock comp this quarter.

Question: Brendan Lynch - Barclays Services Corp - Analyst : Okay, thanks. That's helpful. And then it looks like you only incurred about $14 million of maintenance CapEx year-to-date, but guidance implies $31 million in the second half at the midpoint. Can you provide any details on what might be planned to get you to the $45 million midpoint or even into the range that you're suggesting?

Question: Jonathan Atkin - Rbc Capital Markets - Analyst : Okay, thanks for The call.

Question: Richard Gill - JPMorgan Chase & Co. - Analyst : I wanted to ask about as two of you, I guess, base customers and national carriers get to 80%, 90% 5G coverage. Do you expect any sort of, I guess, fall off next year as second carrier reaches that level? And maybe along with that, what are you seeing in your pipeline in the business for next year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 23, 2025 / 9:30PM, CCI.N - Q2 2025 Crown Castle Inc Earnings Call

Question: Richard Gill - JPMorgan Chase & Co. - Analyst : And some of the increase, not all of it, obviously, but some of it was from the back billing. It seems like that's been also an improvement benefit from operations. Should we see more of this going forward as you continue to improve operations or will it be a little bit more episodic?

Question: Richard Gill - JPMorgan Chase & Co. - Analyst : Thank you.

Question: Matthew Niknam - Deutsche Bank AG - Analyst : Hey, guys, thanks for taking the question. Just one for me. Any implications on the pacing of carrier investment post recent tax reform that you've picked up in conversations with customers? Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 23, 2025 / 9:30PM, CCI.N - Q2 2025 Crown Castle Inc Earnings Call

Question: Matthew Niknam - Deutsche Bank AG - Analyst : Appreciate it. Thanks Dan.

Question: Nicholas Del Deo - Moffettnathanson LLC - Analyst : Hey, thanks for your questions. Just two relatively quick ones. So you're projecting $185 million in discretionary CapEx for the year. I think in the first half, it was $66 million, which implies a pretty sharp increase in the second half. Is that from planned investments in systems or seasonality or are you budgeting for something else in there? And then on the $10 million reduction in G&A that you're expecting, did that primarily relate to power G&A or share G&A?

Question: Nicholas Del Deo - Moffettnathanson LLC - Analyst : Okay. Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 23, 2025 / 9:30PM, CCI.N - Q2 2025 Crown Castle Inc Earnings Call

Question: Nicholas Del Deo - Moffettnathanson LLC - Analyst : Okay, great. Thanks guys.