American Tower (AMT) Q3 2025: Data Center Revenue Jumps 14% as Leasing, Services Outperform
American Tower’s third quarter showcased robust growth across towers and data centers, with CoreSite, its data center platform, delivering standout double-digit gains and U.S. services revenue hitting near-record levels. Management raised full-year guidance across all key metrics, reflecting confidence in sustained mobile data demand and disciplined cost execution. With industry spectrum activity and carrier consolidation accelerating, AMT is positioning for continued organic growth and margin expansion, while opportunistically deploying capital through buybacks and targeted CapEx.
Summary
- CoreSite Data Center Momentum: Double-digit leasing and pricing gains reinforce asset quality and AI-driven demand tailwinds.
- Carrier Activity Drives Leasing: Elevated U.S. services and co-location applications signal healthy network investment pipeline.
- Capital Allocation Discipline: Share buybacks and CapEx focus on developed markets, while balance sheet flexibility remains a strategic lever.
Performance Analysis
American Tower delivered strong third quarter results, with total revenue up nearly 8% year-over-year, driven by steady organic growth across its tower and data center portfolios. CoreSite, the company’s data center business, led with over 14% property revenue growth, underpinned by record retail leasing and robust demand for hybrid and AI workloads. U.S. and Canada property revenue was flat, but excluding non-cash revenue and Sprint churn, grew approximately 5%, while international property revenue increased about 12%.
Adjusted EBITDA rose nearly 8% year-over-year, supported by 20 basis points of margin expansion, reflecting disciplined cost management and services outperformance. Attributable AFFO per share as adjusted grew roughly 10%, with bottom-line strength enhanced by prudent below-the-line cost control. Management raised full-year guidance across property revenue, adjusted EBITDA, and AFFO, citing FX tailwinds, U.S. services outperformance, and net interest benefits. Notably, the company executed $28 million in share repurchases post-quarter, highlighting confidence in valuation and future cash flows.
- Data Center Outperformance: CoreSite achieved record retail leasing and strong pricing, with stabilized yields expected in the mid-teens or higher.
- International Towers Growth: Africa and APAC delivered double-digit organic growth, offsetting low single-digit gains in Latin America.
- Margin Expansion Continues: 300 basis points of EBITDA margin expansion since 2020, with further efficiencies targeted via global operations initiatives.
With application volumes up 20% and co-location applications growing 40% year-over-year, AMT’s leasing pipeline remains robust, supporting visibility into 2026 network densification activity.
Executive Commentary
"Demand for mobile data, the backbone of our business model, continues to rise at a torrent pace. In the U.S., the most recent CTIA survey showed that mobile data consumption in 2024 increased approximately 35% year over year for the third straight year... Experts believe that the rapid growth in mobile data consumption will require a doubling in overall network capacity over the next five years, which in turn will require a significant increase in cell sites that benefit our tower business."
Steve Vondran, President and Chief Executive Officer
"Adjusted EBITDA grew nearly 8% year-over-year, as strong revenue growth was complemented by 20 basis points of cash margin expansion... Our balance sheet remains strong. With our net leverage now at 4.9 times, $10.7 billion in liquidity, and low floating rate debt exposure, we have significant financial flexibility."
Rod Smith, Executive Vice President, Chief Financial Officer, and Treasurer
Strategic Positioning
1. Data Center Acceleration and AI Tailwinds
CoreSite, AMT’s data center platform, is capturing surging demand for hybrid cloud and AI workloads, with customers expanding installations to support inferencing and GPU-driven services. Record retail leasing and robust pricing power are driving stabilized yields in the mid-teens or better, and the business is outperforming original underwriting assumptions. AMT holds 296 megawatts of power for development and is actively constructing 42 megawatts, providing a runway for continued growth as AI adoption intensifies.
2. U.S. Tower Leasing and Carrier Consolidation
Leasing activity remains strong, with 75% of U.S. towers upgraded to 5G and significant runway for further densification. Carrier spectrum acquisitions and ongoing M&A are expected to drive network investment, supporting AMT’s long-term organic growth targets. While U.S. Cellular exposure is modest (<1% of U.S. revenue), management is closely monitoring churn and renewal cycles.
3. International Growth and Portfolio Diversification
International towers delivered 12% property revenue growth, with Africa and APAC leading. 5G mid-band coverage is still nascent in many markets (Europe ~50%, Latin America ~20%, Africa ~10%), offering a multi-year growth opportunity as carriers invest in network buildouts.
4. Margin Expansion and Cost Discipline
AMT has expanded EBITDA margins by 300 basis points since 2020, driven by global cost efficiencies and SG&A control. The newly appointed Chief Operating Officer is tasked with further streamlining operations, leveraging automation and best practices to bend the cost curve and sustain margin gains.
5. Capital Allocation and Shareholder Returns
Capital allocation remains disciplined, with $3.2 billion targeted for dividends, $1.7 billion in CapEx (80% in developed markets), and opportunistic share buybacks. Management continues to prioritize long-term shareholder value, weighing M&A, debt reduction, and buybacks against return thresholds and market conditions.
Key Considerations
American Tower’s Q3 results reinforce the durability of its business model and the breadth of its growth levers, spanning towers and data centers across developed and emerging markets. Strategic context this quarter centers on the interplay between network densification, AI-driven data center demand, and disciplined capital deployment.
Key Considerations:
- AI and Hybrid Cloud Demand: CoreSite’s interconnection-rich facilities are increasingly critical as enterprise customers co-locate AI inference with hybrid cloud deployments.
- Carrier Spectrum Deployment: Recent spectrum auctions and acquisitions are expected to translate into incremental leasing and densification activity, particularly as higher-frequency bands are deployed.
- Legal Disputes and Contract Enforcement: Ongoing litigation with DISH (4% of U.S. revenue) and AT&T Mexico (Latin America revenue reserves) could affect near-term revenue but management remains confident in contract enforceability.
- Cost Optimization Initiatives: Upcoming Q4 update will detail further operational streamlining, with incremental improvements expected rather than step-function changes.
- Shareholder Value Focus: Share buybacks signal management’s view of undervaluation and confidence in upper single-digit AFFO per share growth.
Risks
AMT’s outlook is exposed to carrier consolidation, legal disputes, and spectrum deployment timing, which may introduce variability in leasing and churn. Emerging market volatility, FX swings, and regulatory changes remain ongoing risks, while the pace of AI and 5G adoption will determine the durability of current growth rates. Management’s conservative approach to reserves and litigation underscores a cautious stance on disputed contracts.
Forward Outlook
For Q4 2025, American Tower guided to:
- Raised property revenue, adjusted EBITDA, and AFFO per share guidance, with mid-single-digit organic growth assumptions unchanged.
- Continued double-digit data center growth and stable international tower momentum.
For full-year 2025, management raised guidance:
- Property revenue up $40 million at the midpoint, adjusted EBITDA up $45 million, and AFFO up $50 million.
Management highlighted several factors that will shape the outlook:
- FX tailwinds and U.S. services outperformance as key drivers of the guidance raise.
- Future cost efficiency updates and capital allocation priorities to be detailed with 2026 outlook.
Takeaways
American Tower’s Q3 results validate its dual-engine model, with towers and data centers both delivering growth and margin expansion. Management’s confidence in organic growth, coupled with a disciplined capital allocation framework, positions AMT to capitalize on secular mobile data and AI trends.
- Data Center and Tower Synergy: CoreSite’s performance and pipeline reinforce the strategic fit and long-term value of combining towers with interconnection-rich data centers.
- Carrier Activity Remains Robust: Elevated leasing and services activity, plus spectrum deployment, support a healthy 2026 pipeline.
- Watch for 2026 Efficiency Initiatives: Forthcoming details on cost savings and operational simplification could provide incremental upside to margin trajectory.
Conclusion
American Tower’s Q3 execution reflects a resilient business model, with both towers and data centers benefiting from secular demand. With a strong balance sheet and clear capital priorities, AMT is well positioned to deliver on its industry-leading AFFO per share growth ambition as network and AI adoption accelerate.
Industry Read-Through
AMT’s results highlight the converging tailwinds for tower and data center operators, as mobile data growth, AI workloads, and spectrum deployments drive demand for both verticals. Carrier consolidation and spectrum auctions are expected to spur further network investment, favoring landlords with scale and operational expertise. The shift toward hybrid cloud and AI inferencing underscores the rising value of interconnection-rich data centers, with implications for peers exposed to retail and enterprise colocation. Cost optimization and capital discipline are emerging as differentiators, especially as public market multiples compress and private valuations remain elevated.