AMT — Q2 2026 Financial Report Analysis

Net income more than doubled. Almost none of it came from leasing towers.

American Tower reported second-quarter 2026 results on July 28, 2026. Net income attributable to common stockholders rose 136.5% to $867.5 million and diluted earnings per share went from $0.78 to $1.86. Nearly all of that increase is an accounting translation effect on the company's euro-denominated debt, not money the business earned from tenants.

The cash measures tell the real story. AFFO per share grew 4.2%. Organic tenant billings growth — the increase in recurring rent billed on sites the company already owned a year ago, excluding acquisitions, new construction and currency moves — fell to 1.7% from 4.7% a year earlier. The U.S. & Canada tower segment, which is 47% of property revenue, shrank 2.5%.

A note on the vocabulary, because the two headline numbers point in opposite directions. AFFO — adjusted funds from operations — is what REITs report instead of net income. Real estate depreciation is a large non-cash charge that assumes an asset is being used up on a fixed schedule; a thirty-year-old tower carrying three tenants is not. AFFO adds depreciation back and strips out non-cash revenue and one-off items, so it approximates the cash available to pay distributions. The gap is not small here: American Tower booked $514.4 million of depreciation, amortization and accretion against $2.75 billion of revenue this quarter.

Source: Q2 2026 Form 10-Q (accession 0001053507-26-000133, filed July 28, 2026) and the Q2 2026 earnings release furnished the same day. Prior-year net leverage from the Q2 2025 earnings release.

Where the $507 million of extra net income came from

Net income rose $507.0 million year over year. Foreign currency movements swung by $526.1 million over the same span: a $42.1 million gain this quarter against a $484.0 million loss a year ago. These are unrealized translation effects, mostly on €7.5 billion (about $8.6 billion) of euro-denominated senior notes and on intercompany balances held in currencies other than the borrowing subsidiary's own. When the dollar weakens, dollar-reported debt balances rise and the company books a loss; when it strengthens, a gain. No cash changes hands.

That swing alone is larger than the entire increase in net income. Working the other way, unrealized gains on U.S. equity securities fell to $12.0 million from $110.7 million. Net of both, pre-tax income excluding currency and mark-to-market items was roughly flat. The effective tax rate also fell to 12.1% from 25.7%, which flatters the bottom line further — partly because REITs deduct distributions to shareholders against REIT income, and partly because the prior-year quarter carried an accrual for repatriating funds from foreign subsidiaries.

Nareit FFO, which adds back depreciation but not currency, jumped 63.4% for the same reason. AFFO does strip currency out, which is why it grew 3.8% — and why it is the number to watch.

Takeaway: The 136.5% jump in net income is a currency translation artifact worth more than the entire increase; the operating business grew AFFO per share 4.2% while its underlying leasing growth (organic tenant billings) slowed from 4.7% to 1.7%. Two things are holding the cash number up while leasing decelerates — a 65%-margin U.S. tower base whose costs barely move, and a data center business compounding in the mid-teens. Neither offsets the fact that American Tower's largest segment is currently shrinking.

DISH: a known churn event that became a bankruptcy

The single biggest drag on U.S. leasing is the loss of DISH Wireless. The sequence in the filing: DISH claimed in September 2025 it was excused from the 2021 Strategic Collocation Agreement; American Tower sued in Colorado federal court in October 2025; DISH went into payment default in January 2026; American Tower terminated the agreement effective June 2, 2026, amended its complaint on June 15 to add damages claims and to name parent EchoStar for tortious interference; and on June 30, 2026 DISH filed for Chapter 11.

The financial footprint is disclosed: DISH was approximately 2% of total property revenue and approximately 4% of U.S. & Canada property revenue in 2025, and from January 1, 2026 100% of DISH revenue is reflected in churn. Churn ran at approximately 5% of tenant billings in the first half of 2026 against a normal run-rate low-single-digit level. The company also took $17.5 million of DISH-related impairment charges in the first half.

In the quarter's revenue bridge, U.S. & Canada cancellations were $63 million against $29 million a year ago. Colocations and amendments — new tenant equipment on existing towers, the growth engine — actually held up at $33.8 million versus $39 million, and contractual escalations contributed $39 million. Underlying demand is intact; the segment's organic growth of just 0.7% is what remains after DISH is subtracted from it. With a bankrupt counterparty and an unsecured damages claim, recovery on the terminated contract should be treated as an option with little assumed value, not as a receivable.

The U.S. revenue decline is mostly an accounting reversal, not lost rent

U.S. & Canada property revenue fell $32.7 million (−2.5%) to $1,274 million, but tenant billings — actual rent billed — grew $8.7 million. The gap is straight-line accounting. Under GAAP, rent on a lease with built-in escalators is recognized evenly across the term rather than as billed, which front-loads revenue in the early years and reverses it later. The segment recorded a $44.0 million year-over-year decrease from straight-line accounting, flipping the line from +$18 million of straight-line revenue in Q2 2025 to −$26 million this quarter as older, front-loaded leases run into their back halves.

This matters for reading the guidance: management expects U.S. & Canada property revenue to decline 3.0% for the full year, but says over 3 percentage points of that is the straight-line reversal. Consolidated property revenue guidance carries roughly a 2-point drag from the same source (a negative $66 million straight-line revenue contribution for the year, of which negative $124 million is U.S. & Canada). None of it affects cash, and AFFO adds it back — which is exactly why AFFO per share is growing while U.S. GAAP segment revenue falls.

Segment growth: how much is currency, how much is fuel, how much is real

Reported segment growth rates are not comparable to each other without adjusting for translation and pass-through costs.

Latin America is the sharpest divergence in the filing. Reported revenue grew $52.2 million, of which $44.0 million was currency translation (Brazilian real +$20.1 million, Mexican peso +$14.8 million, Colombian peso +$5.0 million) and $14.1 million was a reduction in revenue reserves — a bad-debt provisioning benefit, not new business. Tenant billings actually fell $7.0 million, driven by $13.5 million of churn in excess of escalations from customer cancellations in Brazil. Management guides the segment to roughly −3% organic tenant billings for the full year. A segment posting +13.4% headline growth with negative underlying leasing is exactly the kind of number that should not be read at face value.

Africa & APAC's 23.5% growth is also inflated, though less deceptively. Of the $79.0 million increase, $23.7 million is currency (Nigerian naira +$13.9 million, Ghanaian cedi +$5.9 million, South African rand +$5.1 million) and $12.6 million is higher pass-through revenue from rising fuel costs. Pass-through revenue reimburses the company for power and fuel it buys on tenants' behalf — it arrives with a matching cost, so it inflates revenue without adding profit. Direct expenses rose $31.4 million, and segment operating profit margin fell from 63% to 59% as a result. Real organic leasing here is +10.6%, genuinely the best in the portfolio, and management guides to roughly 8.5% for the year. But the reported revenue line overstates it by about half.

Europe is the cleanest of the international segments: $9.4 million of tenant billings growth, $6.5 million from amortization of tenant capital contributions, and $7.1 million of euro translation benefit, with margin flat at 57%.

Services revenue fell 38.4% to $61 million on lower site application, zoning and permitting, structural analysis and construction management work. Services is under 3% of revenue but is a real-time indicator of carrier activity: when carriers slow down site work, colocation and amendment revenue usually follows with a lag. This is the most direct forward warning signal in the quarter.

Data centers are the growth engine and are absorbing the capital

The CoreSite-derived Data Centers segment — 30 facilities across 11 U.S. markets, roughly 3.8 million net rentable square feet — grew revenue 13.4% to $297 million. The composition matters: $20.3 million from new lease commencements, customer expansions and rent increases on renewals; $8.2 million from power revenue on higher consumption and pricing; $3.5 million from interconnection (cross-connect) revenue on net additions and price increases; and $3.2 million from straight-line revenue. Rising rents on renewal plus interconnection growth is the signature of a facility running at high utilization with pricing power, not of growth bought by adding capacity cheaply.

Management raised full-year Data Centers guidance to $1,200–$1,220 million, implying 14.9% growth, and cited "Data Center outperformance" as one of three reasons for raising the consolidated outlook. Capital allocation has followed: $695 million of data center development spend sits inside full-year discretionary capital projects of $1,050–$1,080 million. A segment producing 11% of property revenue is taking roughly two-thirds of the discretionary capital budget.

Margin has stayed at 53% despite direct expenses rising $10.9 million on utility costs, and segment SG&A rose 40% to $26.7 million — the fastest SG&A growth of any segment, consistent with building out a sales and operations organization ahead of capacity. The margin is structurally lower than the tower segments (79% in U.S. & Canada) because power is a genuine cost of goods, not a pass-through of land rent. Growth here is accretive to the growth rate but dilutive to the consolidated margin, which is part of why Adjusted EBITDA margin slipped 0.9 points.

Balance sheet: leverage down, cost of debt up

Net leverage improved to 4.9x from 5.1x — net debt of $35,427 million (total debt $37,190 million less $1,763 million of cash) against annualized Q2 Adjusted EBITDA of $7,233 million. Liquidity stood at roughly $9.9 billion. The company also sold two subsidiaries in the quarter: ATC Philippines for $75.6 million on June 15 and its controlling interest in Bangladesh's Kirtonkhola Tower for $6.9 million on June 29, together producing a $20.4 million net gain — small transactions, but consistent with pruning subscale Asian markets.

The refinancing arithmetic is the concern. In the quarter American Tower repaid $700.0 million of 1.600% notes and €500.0 million of 1.950% notes, and issued €750.0 million of 4.000% notes due 2033. After quarter end, on September 9, 2026, it priced $1.6 billion of dollar notes: $500 million at 5.300% due 2031, $500 million at 5.560% due 2033, and $600 million at 5.750% due 2036. Sub-2% pandemic-era paper is being replaced at 4% to 5.75%.

That is already visible. Cash paid for interest in the first half was $789.4 million against $684.2 million a year earlier, up $105.2 million or 15.4% — a faster increase than interest expense on the income statement (+5.1% for the half), because accrual interest smooths what cash payments do not. Set that $105.2 million against full-year AFFO guidance of roughly $5.2 billion and the scale is clear: interest is consuming about two points of AFFO in the first half alone, and the second-half refinancings were priced higher still. Full-year guidance assumes cash interest expense of $1,380–$1,400 million. With net leverage at 4.9x and euro notes maturing through 2034, this is a mechanical, recurring drag rather than a one-time step.

Capital returns

The quarterly distribution was $1.79 per share, up 5.3% year over year, costing $834.1 million in the quarter; the board declared the same $1.79 again on September 18, 2026, payable October 20 — flat sequentially, as is normal for the company's pattern of annual step-ups. Against AFFO per share of $2.71, the payout ratio is 66%, leaving meaningful retained cash. The company repurchased about 0.1 million shares for $19 million in Q2, after $202.9 million of buybacks in the first half, which is why diluted share count fell 0.5% and AFFO per share (+4.2%) grew faster than AFFO in dollars (+3.8%).

First-half cash from operations was $2,887.4 million, up 12.1%, against $770.4 million of property and equipment spending and $1,641.3 million of common distributions. The distribution is comfortably covered.

Guidance and outlook

Management raised the full-year 2026 outlook for the second time this year:

Read the composition of the raise before reading the raise. Management attributes it to three things: currency, data center outperformance, and one-time expense benefits. Currency alone accounts for $35 million of the property revenue increase, $29 million of the AFFO increase and $0.06 of the $0.09 AFFO-per-share increase — two-thirds of it. The net income midpoint increase of $255 million is explicitly "primarily due to unrealized foreign currency gains," which is to say it is not an earnings upgrade at all. The genuinely operational part of the raise is roughly $0.03 per share.

The guidance also embeds a currency assumption set (5.15 Brazilian reais, 0.86 euros, 17.50 Mexican pesos, 1,380 Nigerian naira per dollar, among others) that will not hold. With 33% of revenue and 42% of operating expenses denominated in foreign currencies, translation is a recurring source of noise in both directions: the same line produced an $829.7 million loss in the first half of 2025 and a $110.2 million gain in the first half of 2026. The company does hedge structurally rather than with derivatives: €4.7 billion ($5.4 billion) of euro notes are designated as a net investment hedge against its European subsidiaries, so those translation effects route to other comprehensive income rather than net income. The remaining €2.8 billion of euro debt does not get that treatment, which is where the income-statement volatility originates.

Our read on trajectory. Full-year organic tenant billings growth is guided to roughly 1% consolidated — U.S. & Canada around 0.5%, Latin America around −3%, Africa & APAC around 8.5%, Europe around 4%. That is a trough, and its composition tells you when it lifts. The DISH drag is now fully in the run-rate (100% of DISH revenue moved to churn on January 1, 2026), so it annualizes out of the comparison from Q1 2027 and U.S. organic growth should step back toward the 3–4% range on unchanged carrier activity. The straight-line reversal is a multi-year headwind to reported revenue but touches neither cash nor AFFO. The Brazil cancellations, following carrier consolidation there, are a genuine loss of tenants rather than a timing item and will take longer to lap.

Against that, the data center segment growing at 15% on a $1.2 billion base adds roughly 1.7 points to consolidated property revenue growth per year and is rising, and rising coupon costs subtract a couple of points. The reasonable base case is AFFO per share growth in the low-to-mid single digits through 2027, accelerating toward high single digits in 2028 if U.S. leasing normalizes post-DISH and data center development converts at current returns. The risk to that is the Services line: a 38% decline in carrier site work is not consistent with an imminent reacceleration in U.S. colocations, and it is the leading indicator that would need to turn first.

For an investor, the asset remains what it has always been — long-dated, escalator-linked contracts on infrastructure with high incremental margins and a 66% AFFO payout. What changed this year is that the growth rate stepped down to a level where the distribution's 5.3% increase is running ahead of AFFO growth of 3.0%. That is sustainable for a year or two out of the retained 34%, not indefinitely.