American Tower today announced its Q1 2022 earnings and provided updates on its i) organic tenant billings growth, ii) revised outlook for 2022, iii) portfolio growth through M&A, tower builds, and new market expansions, and iv) data center segment, which includes the company CoreSite.

As of Q1 2022, American Tower owns over 221k communications sites globally, of which 43k are located in the U.S. & Canada and 178k reside in international markets. Additionally, American Tower operates 27 data centers across the United States.

Financial Performance in Q1 2022 – American Tower

In Q1 2022, American Tower reported total revenue of $2.66bn, an 8.8% increase quarter-over-quarter, and adjusted EBITDA of $1.62bn, a 7.2% increase quarter-over-quarter. Therefore, the company’s adjusted EBITDA margin was 61.0% in Q1 2022, a ~95 bps decline quarter-over-quarter.

Property Revenue

For Q1 2022, American Tower’s property revenue was $2.60bn (98% of total), which grew 9.5% quarter-over-quarter (FX-neutral basis). Decomposing this figure:

  • United States & Canada: property revenue of $1.23bn, which was unchanged quarter-over-quarter
  • International: property revenue of $1.18bn, implying growth of 5.2% quarter-over-quarter (FX-neutral basis)
  • Data Centers: property revenue of $184m, which represents American Tower’s first full-quarter contribution from CoreSite

Note: American Tower’s quarter-over-quarter growth rates benefit from the company’s acquisition of CoreSite, which closed on December 28, 2021.

Operational Performance in Q1 2022 – American Tower

Overall, American Tower generated net organic tenant billings growth of 3.0% in Q1 2022.

Organic Tenant Billings Growth for Q1 2022
American Tower Organic Tenant Billings Growth Q1 2022

Of this total, the U.S. and Canada had 0.6% net organic tenant billings growth, while international markets experienced 7.4% net organic tenant billings growth, on a blended basis. Specifically, organic growth in international markets was strong in Europe (18.8%), Latin America (8.7%), and Africa (8.0%), in addition to being modest in India (2.1%), as churn dissipates.

Growth Drivers and Impediments

In Europe, American Tower’s net organic tenant billings growth of 18.8% was driven by the company’s Telxius assets, particularly in Germany. At the same time, American Tower’s legacy business in Europe grew more than 6% on an organic tenant billings growth basis, which comparing it to the same period a year ago, yielded growth of only 3% to 3.5%.

In contrast, in the United States, American Tower’s holistic master lease agreement (MLA) with Verizon has expired. Therefore, Verizon is now on an à la carte pricing model for new deployments with American Tower in 2022. Under an à la carte pricing model, American Tower’s use right fee is no longer applicable and thus not paid at the beginning of 2022. In turn, the lack of MLA / use right fee is pressuring American Tower’s U.S. organic tenant billings growth in the first-half of 2022.

For the remainder of 2022, American Tower’s CFO, Rod Smith, states that the company will “see a decline in gross organic new business in the second quarter, before ramping up in the back-half of the year”.

Outlook for 2022 – American Tower

American Tower increased the mid-point of its full-year 2022 outlook for property revenue by $75m (up 0.7%) and adjusted EBITDA by $55m (up 0.8%), as compared to the company’s prior outlook in Q4 2021.

Full-Year 2022 Outlook – as of April 2022
$ in millionsLowHighMid-Point% Raised
Property Revenue$10,295$10,475$10,3850.7%
Adjusted EBITDA$6,555$6,665$6,6100.8%

For full-year 2022, American Tower provides an outlook for total property revenue of $10.3bn to $10.5bn. Of this total property revenue, American Tower expects the following contributions by segment, at the mid-point:

  • United States & Canada: property revenue of $4.93bn, roughly flat year-over-year
  • International: property revenue of $4.71bn, an increase of 15.9% year-over-year (FX-neutral basis)
  • Data Centers: property revenue of $750m, the majority of which was acquired through CoreSite

Additionally, the company forecasts adjusted EBITDA of $6.56bn to $6.67bn. Overall, the mid-point of American Tower’s 2022 outlook infers a year-over-year increase of 15.4% and 11.6% in total property revenue and adjusted EBITDA, respectively (FX-neutral basis).

Through its full-year 2022 outlook, American Tower is forecasting consolidated net organic tenant billings growth of ~3%, which derives from gross organic tenant billings growth of at least 5% and churn of ~2%.

Organic Tenant Billings Growth Outlook for 2022
American Tower Organic Tenant Billings Growth Outlook 2022 April Update

Geographically, American Tower’s organic tenant billings growth outlook for 2022 is decomposed as follows:

  • U.S. & Canada: ~1% net organic tenant billings growth, which derives from gross organic tenant billings growth of ~5% and churn of ~4%. In isolation, the impact associated with Sprint (T-Mobile) represents 3.7% of churn
  • Europe: >9% net organic tenant billings growth, with Germany being the key driver. Importantly, churn is also expected to decline to ~1.5% in 2022
  • Latin America: >6% net organic tenant billings growth. Notably, CPI-based escalators, are anticipated to be ~300 bps higher in 2022, however, this will be partially offset by higher churn of ~5% in 2022
  • Africa: >6% net organic tenant billings growth
  • Asia-Pacific (mainly India): ~2% to 3% net organic tenant billings growth. Churn, which has been historically elevated in India, is expected to halve, from ~10% in 2021 to 5% in 2022

As compared to its prior outlook for 2022, American Tower has modestly raised its expectations for organic tenant billings growth in Europe and Africa.

1&1 AG – Germany

In April 2022, American Tower signed a 20-year contract with 1&1 AG, a wireless carrier in Germany, to provide 1&1 with access to colocation on its tower infrastructure in Germany – which currently comprises a portfolio of 14.7k communications sites. However, American Tower’s CFO, Rod Smith, states that the contract is “not really driving additional growth in our 2022 organic tenant billings yet”, but rather “will provide growth over the long-term and maybe even pick-up in the back-half of this year [2022] a little bit”.

Oi SA – Brazil

Following Brazil’s wireless carrier consolidation from 4 to 3, Oi SA was split-up and is now part of Brazil’s other wireless carriers, namely Vivo (Telefônica Brasil), Claro (América Móvil), and TIM SA (Telecom Italia). To-date, TIM SA has shared that it intends to decommission 4.4k tower sites in Brazil, out of the 7.2k tower sites it received from acquiring a portion of Oi SA. As such, American Tower’s exposure to Oi SA, as a tenant, is becoming relevant as tower decommissioning commences.

As of Q1 2022, American Tower operates 22.9k sites in Brazil, leasing space to all of Brazil’s wireless carriers. More specifically, at quarter-end, Oi SA generates 1.1% of American Tower’s total property revenue, equivalent to ~$115m, on an annualized basis. Presently, Oi has ~6.7 years, on average, of remaining contract term with American Tower. Yet, American Tower’s CFO, Rod Smith, states that “there could be some leases that come up a little bit earlier than that. And we may see churn beginning as early as next year and kind of moving through the next few years”.

Portfolio Growth – M&A, Tower Builds, New Markets

Site Acquisitions

During Q1 2022, American Tower spent ~$129m on acquisitions. Of this total, ~$30m was paid to acquire 27 communications sites and other communications infrastructure in the United States, Canada, and Nigeria. Additionally, the remaining ~$99m represents cash paid associated with sites that were acquired in 2021 and American Tower clarifies that “many of them were in Europe”.

To this end, American Tower has a build-to-suit (BTS) program with Orange in France whereby Orange will construct and deploy new sites and then sell/transfer the sites on to American Tower, as and when they are completed. In return, Orange makes a 20-year commitment to American Tower to use its hosting services for its active equipment, from the date of the first transfer of the sites.

Site Builds

During Q1 2022, American Tower constructed 1.45k new sites, averaging 13.9% Day-1 net operating income (NOI) yields. Of this total, 90%+ of the newly constructed sites were in India, Bangladesh, and the Philippines (700+ sites) as well as Africa (600+ sites). Particularly, in Africa, the company is building the majority of its new sites in Nigeria, Kenya, Ghana, and Uganda.

For full-year 2022, American Tower anticipates building a total of 6.0k to 7.0k new tower sites globally. Specifically, these new builds include India (4k+ sites), Africa (1.9k sites), Latin America (500 sites), and Europe (500 sites). Also, American Tower is “on-track” to meet its long-term goal of constructing 40k to 50k communications sites globally, from 2021 to 2025.

New Markets – Bangladesh, Philippines

In Q1 2022, American Tower continued its growth in new markets in the Asia-Pacific region, namely Bangladesh and the Philippines:

  • Bangladesh: American Tower operates 254 sites in Bangladesh, adding 134 sites quarter-over-quarter
  • Philippines: American Tower operates 239 sites in the Philippines, adding 142 sites quarter-over-quarter

Data Centers – CoreSite Realty, DataSite, Colo Atl

As of Q1 2022, American Tower’s total data center portfolio comprised 27 facilities, including the operations of CoreSite Realty, DataSite, and Colo Atl. Collectively, American Tower’s data centers offer 226 megawatts of power capacity across 3.5 million net rentable square feet (NRSF). Additionally, in terms of interconnection, these facilities house 35.9k total cross-connects.

At quarter-end, American Tower’s 27 data centers had an occupancy rate of 81.0%, while the company’s stabilized portfolio occupancy was slightly higher at 84.3%. Also, the portfolio’s backlog stands at $19m. Finally, these data centers produced $1,529 in monthly recurring revenue (MRR) per cabinet equivalent billed.

Financial Metrics

In Q1 2022, American Tower’s data center segment reported total operating revenues of $184.3m, which comprises:

  • Rental and Power: $160.0m, equivalent to 87% of total revenue
  • Interconnection: $24.3m, equivalent to 13% of total revenue

In addition, the data center segment yielded operating profit of $91.3m, implying a 49.5% margin.

Development Pipeline

As of Q1 2022, American Tower has 20 megawatts of power capacity, across 148k NRSF, under construction. The company estimates that the total costs for this capacity under construction will be $325.9m. Indeed, this implies a cost to build of $16.3m per megawatt.


American Tower provides the following outlook for its data center segment:

  • Property revenue for full-year 2022 of $750m, at the mid-point
  • Revenue growth range between 6% to 8% (targeting the high-end of the range). Escalators comprising 2% to 4% of this growth
  • Interconnection growth range between 6% to 8%
  • Lease renewals, on a cash mark-to-market basis, expected to be up between 2% to 3%
  • Monthly recurring revenue (MRR) per cabinet is projected to grow by 4% to 6%
  • Rental churn rate, on an annual basis, of 6% to 8%
Adam Simmons covers Towers for Dgtl Infra, including American Tower (NYSE: AMT), Crown Castle (NYSE: CCI), SBA Communications (NASDAQ: SBAC), Cellnex Telecom (BME: CLNX), Vantage Towers (ETR: VTWR), IHS Holding (NYSE: IHS), and many more. Within Towers, Adam focuses on the sub-sectors of ground-based cell towers, rooftop sites, broadcast / radio towers, and 5G. Adam has over 7 years of experience in research and writing for Towers.


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