SBAC Stock: SBA Communications Dividend vs AFFO, Churn and Debt

The dividend against the company's own yardsticks

SBA reports Funds from Operations (FFO: net income plus real estate depreciation and impairments) and Adjusted FFO (AFFO), which also strips out straight-line rent, non-cash compensation and the non-cash part of taxes and subtracts non-discretionary capital spending. The company says: “We only use AFFO as a performance measure.” Per-share figures below are the ones SBA prints; payout ratios are ours.

The payout moved from about 35% to about 41% in one step, in the quarter the dividend rose. Three other yardsticks:

• The cash payout is about half, not 41%. First-half 2026 operating cash flow was $662.3 million and capital expenditures $110.8 million; dividends paid were $267.8 million. The difference from the AFFO ratio is mostly the bigger cash interest bill: net cash interest expense was $122.1 million in Q2, up 9.5%.
• Earnings are noisy. The $9.80 of 2025 diluted earnings includes Q4 2025 other income of $254.3 million, which the AFFO table removes. We use it only as a cross-check.
• The $5.00 a year is 41.1% of the 2026 outlook midpoint of $12.175 (our arithmetic), and between 40.3% and 41.8% across the $11.95 to $12.40 range.
• Taxes. The 10-K says dividends paid in 2025 and 2024 “were ordinary taxable dividends”; see our return of capital page for how REIT dividends are reported.
• The Board decides. The 10-K: “The actual amount, timing, and frequency of future dividends will be at the sole discretion of our Board of Directors.”

Against the other two tower REITs we cover (their Q2 2026 payouts on their own AFFO, from our pages): American Tower paid 66.1% and Crown Castle 94.0%. SBA's ratio is the lowest of the three; the difference is that its AFFO per share is falling, which the sections below explain.

The guidance path and what AFFO per share is doing

SBA gave a 2026 AFFO per share range in February and raised it twice.

The two raises are small: $0.09 at the midpoint in April ($0.05 excluding currency) and $0.02 in August ($0.03 excluding currency). The outlook assumes 106.3 million diluted shares and “does not contemplate any additional repurchases.”

Reported AFFO per share in the first half of 2026 ($6.08) was 4.3% below the first half of 2025 ($6.35, our arithmetic). The Q2 2026 release shows why: AFFO fell 5.2% while Adjusted EBITDA was up 1.8% (flat excluding currency) and net cash interest rose 9.5%.

Tenants: the big three, and the churn that is eating the growth

Two-thirds of revenue has come from three payers for three years running. Domestic sites produced 72.6% of 2025 site leasing revenue, and the average site had 1.8 tenants. In September 2025 SBA signed a long-term master lease with Verizon; the Q3 2025 release gives no dollar terms. Non-cancelable tenant leases at December 31, 2025 total $11.55 billion of future income, of which $2.22 billion, 19.2% (our arithmetic), falls in 2026, so the contracted base does not erode on its own; the risk is non-renewal and carrier consolidation, not the signed calendar.

SBA's own bridge from 2025 to 2026 site leasing revenue (August 3, 2026 outlook) shows how it nets out:

• Sprint. The T-Mobile and Sprint merger completed in 2020 and SBA has since lost overlapping leases; the 2025 outlook carried $51 million of Sprint churn and 2026 carries $55 million to $56 million.
• EchoStar. The 10-K says “EchoStar defaulted on its payment obligations to us” in December 2025, and that it expects this churn to be about $56.0 million of cash site leasing revenue during 2026. The outlook removes all EchoStar contracted revenue; the Q4 2025 release said SBA still intends to pursue its contracted legal rights. We found no filing quantifying any recovery.
• Elevated through 2026. The 10-Q: “We expect churn to be elevated through 2026 due to churn in some of our markets.” It puts domestic churn at $132.0 million to $136.0 million of cash site leasing revenue and international churn at $36.0 million to $40.0 million, the latter partly from Oi wireline.
• Escalators. The bridge shows escalations of $71 million to $74 million, 2.8% to 2.9% of 2025 site leasing revenue (our arithmetic). Domestic escalations are 2.7% to 2.8% of domestic revenue.
• What the bridge implies. Without acquisitions, new towers and currency, 2026 organic site leasing revenue falls by about $36 million to $53 million (our arithmetic). The company's guided growth is the $86 million non-organic line and the $39 million of currency.

Towers by market: the United States and 12 other countries

• The U.S. count is flat. Domestic sites were 17,394 at December 31, 2025 and 17,362 at June 30, 2026. In Q2 2026 SBA acquired 6 sites and built 109 (10 domestic, 99 international) and removed 83 through decommissioning, reclassification or sale.
• Central America is the build story. The 10-Q credits 7,133 towers acquired since January 1, 2025, including 7,110 from Millicom, and the CEO said production under the Millicom build-to-suit agreement should keep growing through the year.
• Exits. In 2025 SBA sold all towers in the Philippines and Colombia and substantially all of its Canadian operations (365 towers for CAD$446.0 million, closed October 15, 2025). Disposals raised $330.4 million in cash and a $208.4 million gain.
• Land. About 71% of towers sit on land SBA owns, on perpetual easements or on parcels with an interest beyond 20 years; the average remaining ground lease life is 35 years.
• Currency. Revenue in Brazil, Chile and South Africa is substantially all local currency. The August outlook assumes 5.10 reais, 2,560 Tanzanian shillings and 16.40 rand to the dollar for the second half.

Leverage, maturities and the July 2026 refinancing

At June 30, 2026, total debt was $12,778.3 million, of which $9,778.3 million was secured, net debt $12,393.3 million and annualized Adjusted EBITDA $1,935.3 million. In November 2025 SBA revised its stated target to 6.0 to 7.0 times to “allow SBA to transition into an investment-grade Company.” The ratio is computed on a quarter's EBITDA times four and counts SBA's own add-backs, so it is a company measure, not a covenant figure.

• What happened in July. On July 23, 2026 SBA issued $1.35 billion of 4.875% notes due January 2030, $1.35 billion of 5.150% notes due July 2031 and $800 million of 5.450% notes due July 2033, a blended 5.113% with a 4.9-year weighted maturity. It used the proceeds to repay the $1,055 million revolver balance and the $2,248 million term loan, and signed a new $2.5 billion unsecured revolver maturing July 23, 2031 at Term SOFR plus 100 basis points. The August 3 release lists a ratings upgrade from S&P to BBB, and the CEO said SBA “completed our first investment grade bond offering.” On September 25 SBA established a commercial paper program of up to $2.5 billion.
• Pro forma. Our arithmetic on the June 30 balances: debt becomes $12,975 million (12,778.25 minus 1,055.0 minus 2,248.25 plus 3,500) and secured debt about $6,475 million, 49.9% of the total against 76.5% before. This ignores cash and the quarter's activity.
• Balance sheet current maturities were $3,578.6 million at June 30, against $1,935.8 million at December 31, 2025, because the revolver and term loan were then still outstanding; the July repayment removes most of that.

The 2022-1C securities ($850 million at 6.599%) are the one tranche that could be refinanced lower. The outlook's net cash interest expense is $490 million to $498 million for 2026, against $122.1 million in Q2 alone.

Buybacks and share count

SBA had $1.1 billion left under a $1.5 billion plan authorized April 27, 2025. Shares outstanding were 106.088 million at June 30, 2026 against 105.666 million at December 31, 2025, so the count is rising again from stock compensation, while diluted weighted shares in Q2 were 1.4% below a year earlier (our arithmetic). The CEO said that, with the new balance sheet, SBA expects to keep growing the dividend “at the highest growth rate in the industry” while buying back stock. As a reference, the annualized $5.00 is 2.65% of the $188.66 SBA paid in early 2026 (our arithmetic); the filings do not give today's price.

The latest quarter (Q2 2026) in one view

• Revenue. Site leasing revenue was $663.9 million, up 5.1% (3.0% excluding currency): domestic $452.5 million (down 3.7%), international $211.4 million (up 30.5%).
• Profit. Domestic site leasing segment operating profit was $381.0 million (down 4.8%); international $148.8 million (up 31.9%). Tower cash flow margin was 79.5% against 81.0%.
• Per share. AFFO $3.05 (down 3.8%), net income $1.87 (down 10.7%).
• Capital. Total capital expenditures were $91.2 million ($15.8 million non-discretionary), and at the release date SBA had bought or was under contract to buy 58 more sites for $28.8 million.

What to watch before the Q3 report

As of October 19, 2026, the 10-Q for the quarter ended September 30, 2026 is not filed. Last year SBA released Q3 results on November 3 and filed the 10-Q on November 6, 2025; the Q2 2026 release was August 3 and the 10-Q August 6. A similar date in early November is our inference, not an announced date.

What a holder or reader can do with this

This is analysis of public documents, not investment, legal or tax advice. What the filings let you check yourself:

• Pick the payout that fits the question. 41% of AFFO says the dividend is well covered; 48.6% of operating cash flow after capital spending and 66.8% of earnings say it is covered by a smaller margin, because interest and depreciation come before AFFO's add-backs.
• Compare with the other tower REITs on the same basis. American Tower and Crown Castle report their own AFFO definitions; our data center and tower comparison puts American Tower next to Equinix and Digital Realty.
• Read the tenant risk as three payers. Two-thirds of revenue comes from T-Mobile, AT&T and Verizon; further consolidation or a carrier going the way of EchoStar would show up first in churn.
• Check for double exposure. If you own a REIT index fund you may already hold SBAC; our REIT ETF holdings page shows its weight in each of nine funds. If you also hold a non-traded fund, non-traded vs publicly traded REITs explains the different exits.
• Replace the June 30 numbers when the Q3 10-Q is out. Every balance dated June 30, 2026 here will be superseded.

If a large share of your portfolio sits in one REIT with this much customer concentration and a refinancing calendar, a conversation with a qualified adviser about position size and how it fits the rest of your holdings may be worth having.

FAQ

All figures are from SBA Communications Corporation (SEC CIK 1034054) filings read on EDGAR on October 19, 2026: Form 10-K for 2025 (accession 0001034054-26-000002); Form 10-Q for June 30, 2026 (0001034054-26-000011, filed August 6, 2026); the Form 8-K earnings releases for Q2 2025 (0001193125-25-172604), Q3 2025 (0001193125-25-262644), Q4 2025 (0001193125-26-076767), Q1 2026 (0001193125-26-191545) and Q2 2026 (0001193125-26-330639); and Forms 8-K of July 23 (0001193125-26-314131), July 24 (0001193125-26-315142) and September 25, 2026 (0001193125-26-402918). Ratios marked “our arithmetic” are ours; the refinancing illustration is not company guidance. This is analysis of public documents, not investment, legal or tax advice.