American Tower (AMT) Q4 2025: DISH Churn Drives $200M Revenue Reset, Margin Expansion Targets Hold Through 2030
American Tower’s 2025 closed with robust underlying growth, but the full removal of DISH’s lease revenue—about $200 million annually—forces a reset in 2026 and puts management’s margin and growth algorithms to the test. Strategic capital allocation, operational efficiency, and AI-enabled cost controls remain central as the company leans into developed markets and readies for a new phase of 5G and AI-driven demand. Investors should watch for upside from legal recoveries and continued margin expansion as AMT pivots beyond churn headwinds.
Summary
- DISH Default Resets Revenue Base: Full removal of DISH lease revenue clarifies run-rate and de-risks future growth.
- Margin Expansion Remains Core Priority: Cost control and AI-driven efficiency underpin multi-year margin targets despite churn.
- Capital Flexibility Restored: Balance sheet strength enables opportunistic buybacks, selective M&A, and growth CapEx focus in developed markets.
Performance Analysis
American Tower’s 2025 results highlighted resilient organic growth in core tower and data center operations, with consolidated property revenue up mid-single digits and adjusted EBITDA up 5% YoY (7% ex-FX and non-cash items). The tower segment remained the largest contributor, with organic tenant billings growth of about 5%, while CoreSite, AMT’s data center platform, delivered approximately 14% revenue growth, reflecting strong demand for interconnection-rich, AI-ready colocation.
However, the 2026 outlook is fundamentally reset by the complete removal of DISH revenue—roughly $200 million per year— which previously represented 4% of US revenue and 2% of consolidated property revenue. Excluding DISH, organic tenant billings growth guidance is 4% in the US and Canada, and 4.5% when adjusting for churn. Internationally, Africa and APAC lead with 8.5% growth, while Europe and Latin America show diverging trends due to market maturity and churn timing.
- DISH Churn Impact: 2026 organic growth guidance is 1% consolidated, or 4% ex-DISH, resetting run-rate expectations.
- Data Center Outperformance: CoreSite’s double-digit growth and strong pricing support mid-teens stabilized returns.
- Margin Stability Despite Headwinds: Modest 20bps margin contraction in 2026 reflects one-time churn and mix shift, but multi-year expansion targets to 2030 remain intact.
Share repurchases accelerated, with $365 million in Q4 and $53 million YTD in 2026, as leverage returned to the target range (4.9x), restoring full capital allocation optionality. The company’s performance, while pressured by churn, demonstrates the underlying durability of its infrastructure business model and the ability to flex capital toward shareholder returns and high-ROI growth investments.
Executive Commentary
"We have de-risked our business going forward by taking [DISH] out of the numbers. We fully plan to fight the, in the litigation, we think our contract's enforceable. We're going to do everything we can to collect that. But that would all be incremental upside to the current guidance that we're giving out there."
Steve Vondran, President and CEO
"We are now in a place where the balance sheet is very strong and we've regained full financial flexibility. We will make the decisions between [M&A and buyback] in terms of which one provides the best outlook for long-term total shareholder return."
Rod Smith, Executive Vice President, CFO and Treasurer
Strategic Positioning
1. Revenue Durability Through Portfolio Reset
By fully removing DISH’s revenue and legal recovery from run-rate guidance, AMT has clarified its baseline and shifted focus to its strongest, most reliable customers. This positions the business for more predictable organic growth, even as churn events temporarily suppress headline metrics.
2. Operational Efficiency and Margin Expansion
AMT’s multi-year efficiency program, including global land expense management, supply chain unification, and technology platform standardization, is expected to drive 200 to 300bps of tower cash EBITDA margin expansion by 2030. AI adoption is targeted for process automation and predictive maintenance, with incremental upside possible as use cases mature.
3. Data Center Growth as a Secular Tailwind
CoreSite’s double-digit growth is driven by AI, hybrid cloud, and enterprise migration to colocation, supporting mid-teens stabilized yields and providing a counterbalance to slower tower organic growth in mature markets. Pricing power and customer curation in data centers signal strong demand and risk-managed expansion.
4. Capital Allocation Discipline and Flexibility
With leverage back in the 3-5x range, AMT is prioritizing dividends, growth CapEx in developed markets, and opportunistic buybacks. M&A is focused on developed markets only, with a disciplined approach amid a disconnect between public and private multiples.
5. Market Mix Optimization and Portfolio Management
AMT continues to recycle capital away from smaller and emerging markets, favoring high-return investments in the US and Europe. Recent divestitures and a reduced capital commitment to Africa and LATAM reflect a focus on maximizing AFFO per share and reducing volatility.
Key Considerations
2025 was a pivotal year for American Tower, as it proactively reset its revenue base, sharpened its capital allocation, and doubled down on cost discipline amid evolving industry demand. The following considerations frame the strategic context for investors:
Key Considerations:
- Legal Recovery Optionality: Any successful DISH litigation or settlement would be pure upside to current guidance, with potential P&L impact if collections occur.
- Churn Timing and Growth Trajectory: Latin America faces acute churn in 2026, but market repair and organic growth acceleration are now expected a year earlier, beginning in 2027.
- Data Center Expansion Constraints: Power and land availability limit new capacity, but strong demand and pricing support continued investment in select metros.
- AI-Driven Demand and Efficiency: AI workloads are boosting both data center leasing and internal process automation, with incremental margin upside possible as adoption scales.
- Developed Market Focus: Capital deployment is concentrated in US, Europe, and CoreSite, with emerging markets managed for cash flow and selective build-to-suit commitments only.
Risks
Churn risk remains elevated in 2026, particularly in Latin America and from the full removal of DISH revenue in the US, pressuring near-term growth rates. Litigation outcomes are uncertain and timing of potential recoveries is unknown. Data center expansion is dependent on power and land availability, while competitive pressures in both towers and colocation could affect pricing and lease-up rates. Currency volatility and macroeconomic shifts in emerging markets also remain ongoing risks, though exposure is being actively managed down.
Forward Outlook
For Q1 2026, American Tower guided to:
- Consolidated organic tenant billings growth of approximately 1% (4% ex-DISH)
- Adjusted EBITDA growth of 2% ex-FX and non-cash items
For full-year 2026, management maintained:
- Attributable AFFO per share growth of 1% (5% normalized for churn and FX)
- Dividend growth of approximately 5%
- Capital deployment of $1.9 billion, with 85% to developed markets and CoreSite
Management highlighted:
- Margin expansion of 200-300bps by 2030, driven by cost initiatives and AI
- Acceleration in Latin America organic growth expected in 2027, one year earlier than prior guidance
Takeaways
AMT’s 2026 outlook is reset but resilient, with margin expansion and capital discipline offsetting near-term churn headwinds.
- Revenue Reset Clarifies Baseline: Removal of DISH revenue and churn in LATAM create a lower but more predictable growth trajectory, setting up for reacceleration post-2026.
- Margin Expansion Remains Viable: Operational efficiency, AI adoption, and global cost control underpin multi-year margin improvement, even as mix shifts toward lower-margin data centers.
- Watch for Litigation Upside and Data Center Growth: Potential DISH recoveries and continued CoreSite outperformance could provide positive surprises in future quarters.
Conclusion
American Tower enters 2026 with a reset revenue base, robust capital flexibility, and a clear path to margin expansion. While churn and litigation cloud the near-term, the company’s disciplined capital allocation and strategic focus on developed markets and AI-driven efficiency position it well for durable long-term growth and shareholder returns.
Industry Read-Through
AMT’s results and guidance reinforce the secular tailwinds in mobile data consumption, with 5G densification and AI-driven workloads supporting both tower and data center demand. The full removal of DISH revenue sets a precedent for de-risking customer concentration in the tower sector, while the focus on operational efficiency and AI adoption highlights a broader industry shift toward cost discipline. Data center pricing power and capacity constraints signal continued strength for interconnection-rich colocation providers, while the growing importance of developed markets and capital recycling may influence peer capital allocation strategies across the digital infrastructure ecosystem.