Prepared remarks
Welcome, and thank you all for joining today's SBA Second Quarter 2026 Results. Please note that today's call is being recorded. With that, I'd now like to formally begin today's call and turn it over to Louis Friend, Vice President of Finance and Capital Markets. Please go ahead.
Good evening, and thank you for joining us for SBA's Second Quarter 2026 Earnings Conference Call. Here with me today are Brendan Cavanagh, our President and Chief Executive Officer; and Marc Montagner, our Chief Financial Officer. Some of the information we will discuss on this call is forward-looking, including, but not limited to, any guidance for 2026 and beyond. In today's press release and in our SEC filings, we detail material risks that may cause our future results to differ from our expectations. Our statements are as of today, August 3, and we have no obligation to update any forward-looking statements we may make. In addition, our comments will include non-GAAP financial measures and other key operating metrics. The reconciliation of and other information regarding these items can be found in our supplemental financial data package, which is located on the landing page of our Investor Relations website. With that, I will now turn it over to Marc to comment on the second quarter results and 2026 outlook.
Thank you, Louis. We had another good quarter, and our results were in line with our expectation. Given the solid performance in the second quarter, we are modestly increasing our full year outlook for site leasing revenue, AFFO and AFFO per share as compared to our prior 2026 guidance. The primary drivers of these increases include higher straight-line revenues and improved net cash interest expenses. In the second quarter, AFFO per share was $3.05, and we declared a cash dividend of $1.25 per share. We continue to operate efficiently, controlling direct costs and achieving company-wide tower cash flow margins of just under 80%. In the U.S., we added approximately $9 million of domestic new lease and amendment billings in the second quarter. The bulk of the activity continues to come from new colocations as carriers both densify and expand their network footprints. With respect to churn, our prior outlook for both Sprint and EchoStar related churn for the year remains unchanged. With regard to EchoStar, we continue to litigate the matter in federal court and believe strongly in our contractual rights. Internationally, we continue to see healthy demand for our infrastructure, and we added approximately $4 million of new lease and amendment billings in the second quarter. International churn continues to be elevated due to carrier consolidations, carrier bankruptcy, restructuring and wireless operators' network rationalizations. Moving to our balance sheet. I'm very pleased to discuss our recent debt offering where in July, we issued our first unsecured investment-grade bonds. The total amount raised was $3.5 billion and net proceeds were used to pay in full both our Term Loan B and amounts outstanding on our revolving credit facility. As of today, the revolver is fully paid down, and we currently have $570 million of cash on our balance sheet. Pro forma for this transaction, the amount of secured versus unsecured debt is now below 50%. The transaction generated very strong demand for each of the three tranches we issued. The three tranches include $1.350 billion due 2030 with a cash coupon of 4.87%; $1.350 billion due 2031 with a cash coupon of 5.15%; and $800 million due 2033 with a cash coupon of 5.45%. In aggregate, the $3.5 billion has a blended cash coupon of 5.11% and a weighted average maturity of five years. In addition to the new bond offering, we put in place a new larger revolving credit facility with $2.5 billion of capacity, which is unsecured. We now have a solid investor base for investment-grade debt, and we plan to continue to issue investment-grade notes in the future to refinance our upcoming maturing ABS and high-yield securities. I would also like to point out that in June, SBA was upgraded from BBB- to BBB by S&P, another positive step in our new investment-grade journey. Consistent with our prior outlook, we continue to assume that the $1.2 billion November ABS maturity will be refinanced in November of this year at 5.25%. We ended the quarter with approximately $13 billion of total debt. Our current leverage of 6.4x net debt to adjusted EBITDA remains near historical lows and within our target range of 6x to 7x. During the second quarter, we declared and paid a cash dividend of $132.7 million or $1.25 per share. And today, we announced that our Board of Directors declared a quarterly dividend of $1.25 per share payable on September 17, 2026, to shareholders of record as of the close of business on August 20, 2026. This dividend represents an increase of approximately 13% over the dividend paid in the prior-year period and an annualized rate of approximately 41% of the midpoint of our full year AFFO outlook. I will now turn the call over to Brendan.
Thanks, Marc. The second quarter represented another solid period of both financial and operating results. We continue to lead the industry in AFFO per share and dividend growth. Throughout the quarter, the level of customer activity remained steady and in line with the first quarter. In the U.S., our customers continue to invest in their networks, expanding 5G coverage with new spectrum, including C-band, technology upgrades such as massive MIMO antennas and growth in fixed wireless access subscribers. Internationally, we continued the solid progress we made last quarter, integrating the Millicom assets and expanding our new tower build capabilities. We built 99 new towers, up from 75 in the last quarter. We expect this number will increase steadily over time. New tower builds continue to be a good use of capital, and we expect the risk-adjusted returns to exceed our cost of capital often on day one. We continue to see positive organic growth in our international portfolio due in part to local CPI-linked rent escalators. While international churn remains elevated, we continue to focus on locking in stable, predictable operating cash flow through long-term contracts and high-quality customer partnerships. Looking ahead, I am excited about a number of prospects that I think will contribute to organic growth for years to come. On July 22, the FCC formally adopted a plan to auction 160 megahertz of upper C-band spectrum starting in April of next year. When combined with the existing lower C-band spectrum previously auctioned, this auction will create a harmonized super band of 440 megahertz of contiguous mid-band spectrum to be used for wireless. In addition to the large amount of spectrum being made available and the accelerated pace of the auctions, we were very pleased with the stricter build-out requirements established by the FCC, requiring holders to deploy the spectrum or risk forfeiture with no review or waiver process. The upper C-band's build-out requires 45% population coverage two years after the transition deadline and 80% coverage six years after, paired with automatic license termination for not fulfilling the second performance benchmark. In addition, the FCC made clear that alternative uses such as IoT, fixed point-to-point and private networks do not count towards coverage milestones. And these tougher build-out requirements are now expected to also extend to private investment firms and others that hold spectrum into the future. This structure will be helpful in ensuring that license winners are serious about deploying spectrum for the benefit of the American wireless consumer. And this will, of course, be good for SBA. As we invest in supporting our customers in meeting their network build-out goals, we expect to see incremental equipment deployed at our sites, driving organic growth for years to come. And these opportunities do not only apply to the upper C-band. The NTIA recently announced that 2.7 gigahertz spectrum can be repurposed for full power commercial licensed use. Once approved by Congress and coordinated with NOAA and the FAA, the FCC could auction 2.7 gigahertz spectrum as early as 2028. We expect the deployment of this spectrum will also require new equipment at the tower site and support long-term sustained site leasing organic growth. And on Friday, the NTIA announced that it has cleared plans to study the 4.4 gigahertz band for full power commercial license use as well. We now have the largest set of federal spectrum bands ever under consideration for repurposing, including 1.6 gigahertz, 2.7 gigahertz, 4.4 gigahertz and the 7 gigahertz band. While it will be several years before these airwaves are made available for commercial use, real progress is being made that will be supportive of network investment on our infrastructure for the next decade. In addition to new spectrum deployments, I'm excited for the prospect of other new organic growth drivers, including low latency edge compute demand and terrestrial complements to potential future satellite direct-to-device offerings. With regard to edge compute, we see a clear migration towards a distributed architecture with a significant increase in the required number of power and fiber-fed locations to improve speed and latency, enhance redundancy and reduce the concentration of resources needed to support the growth in AI-oriented applications. Our existing portfolio of assets are well suited to support this growing architecture, and I believe we have the opportunity to realize meaningful incremental organic growth over the coming years as a result of this type of activity. With regard to satellite solutions, there's been a lot of discussion around direct-to-device satellite technology, but our view remains unchanged. Satellites are a complement to terrestrial wireless networks, not a substitute for them. However, depending on how the industry develops, the advancement of this technology is expected to provide growth opportunities for our business. Potential new entrants offering direct-to-device satellite-based coverage will require a terrestrial component to their networks in order to provide ubiquitous high-quality coverage at a level competitive with traditional networks. As new providers arise, new opportunities to benefit from our extensive high-quality infrastructure portfolio and our experienced network deployment teams will grow as well. I look forward to the potential of this incremental growth opportunity. Finally, turning to capital allocation. Our dividend remains the fastest growing in the industry and among the fastest growing of all REITs. Nonetheless, as a percentage of AFFO, it remains relatively low, providing capacity to continue allocating significant capital for the benefit of our shareholders. Our leverage at quarter end was 6.4x net debt to adjusted EBITDA, below the midpoint of our target range. As a result, we have ample liquidity to put to work. We will continue to build new towers and look for attractive acquisition opportunities. However, today, we believe share buybacks are the best use of capital at current valuation levels. As Marc mentioned earlier, we have now fully paid off our revolver balance, and we intend to resume share buybacks in the second half of this year. We believe in the strength of our business, the future growth potential and our ability to execute. As a result, we see share repurchases at current valuations as a low-risk, high-return opportunity. Before opening it up for questions, I'd like to thank our team members and customers for their trust in SBA. The company's ability to achieve our vision to be our customers' first choice provider and the industry leader in quality infrastructure solutions is what we work towards every day. I'm excited about the future with new bands of spectrum becoming available, new edge use cases for our existing tower infrastructure and towers being at the center of all future wireless deployments. I'd also like to thank our shareholders for your ongoing support. And with that, operator, we are now ready for questions.
Questions and answers
Moving to the first hand up in our queue, Batya Levi with UBS.
Could you provide a little bit more color on the application volume that you're seeing in the second half? And any early indications of the activity that you talked about, higher colocation and the spectrum held by the carriers — if that could show up as an acceleration in the growth rate into next year?
Sure, Batya. The volumes that we're seeing in terms of applications are relatively consistent with the first half of the year. We haven't necessarily seen an uptick. That's not necessarily the same across all carriers. I assume this question is specific to the U.S. market, so that's how I'm answering it. In the U.S. market, one of our customers is a little bit busier than the others with us today, but that's not really that dissimilar from where we are at various points in time where there's some cyclicality and rotation among who's the busiest. So overall, if you added up the application volumes, they're relatively consistent with where they've been throughout the year. And in terms of the drivers of growth opportunities into the future, particularly around the new spectrum bands, most of what we talked about is longer term in nature. So that's something that's going to happen over the next five-plus years. I don't necessarily expect it to have a significant impact on next year, but we're also not ready to give our outlook for next year's leasing growth yet. So stay tuned for that for next year.
Moving to our next question, Ric Prentiss with Raymond James.
A couple of questions. One, I have to admit, I'm a little confused by why you changed guidance at all when it's like rounding points. Obviously, EBITDA down a little bit, unchanged without FX. But it seems like the ranges were widened. What's kind of the philosophical thought on guidance? And I have a couple of other quick ones.
Yes. I mean, we didn't really change much. Most of the stuff at the top end has changed slightly because of FX, and because we're changing the specific FX assumption, which is really driven by what's happened specifically with the Brazilian real. While it's small, just the math without making a change is driven in large part because of FX, which is why we break out what the change is, excluding FX, and you can see most of those did not change. As you get a little bit further down the P&L, there's a few minor changes that are mostly to do with things like interest expense, which is changed in part because of the financing that we did. So that causes an impact. We're just flowing those into the numbers. But basically, there's no change in our outlook from what we gave last time, except for a couple of these specific things that occurred that we felt we should modify the ranges for. But generally, you're correct. I would expect everything to still end up in the same ranges that we gave before.
Okay. Glad to hear the news on the stock buyback. Earlier today, EchoStar said they're going to do a $5 billion buyback, but it didn't seem like there was pacing there. I appreciate you saying that you could resume in second half '26. I think it's $1.1 billion you guys have left. How should we think about your pacing of the buyback, how it works with leverage and your other capital allocation items?
Yes. I don't want to say exactly and specifically what we would do, but we were trying to be pretty clear that we fully expect to be active during the second half of the year in buying back our stock. If you look at where we were before, we had a fairly large amount outstanding on our revolver. We had some refinancing that we needed to get done. We completed that in July, just a few weeks ago. With that now behind us, we feel like we're in a very strong position to lean into what we think is a very good value in our stock today.
Yes. No, I appreciate that. And last one for me on the competition from satellite, we agree, seems more complementary. But how should we think about what percent of your base is really rural? What percent of your towers? Because we think that's probably the better venue for satellite direct-to-device. How do you think about that — are there some sites on the fringe that might be better served by satellite? And what kind of magnitude is that for you guys?
It's hard to say exactly. When we look at our portfolio, we've done some analysis about what might be those fringe sites. It's probably no more than 2% to 3%, Ric. But even that, I'm hesitant to really quantify because this remains to be seen how this all plays out. I'm not so sure that it's going to be all that impactful at all.
It's a small number. In fact, you might actually find some sites that need to be built, I guess, as you look at when people start using satellite connectivity that they might want to actually say, 'Oh, we need a cell site here.'
For sure. I've shared in the past some stories that I've heard, anecdotal evidence of the need for incremental sites that might come through satellite activity. Our carrier customers today have used the data they've gathered from some satellite services provided through partners to identify places where they had needs to maybe put a tower site to serve a greater amount of usage than they were expecting in a particular location. So I think there will be some balance. There will probably be some fringe sites that perhaps aren't economical to maintain, and there will be other places where the opposite is true, and there'll be new infrastructure added.
Moving to the next caller in our queue, Michael Rollins with Citi.
Two questions, if I could. First, in terms of overall asset strategy, where are you in the process of continuing to optimize your assets, thinking about monetization opportunities, whether it's for a particular market or portions of the market? And then secondly, now that we're in August and you look back and you mentioned your observations on the stock on this call, is there anything you're able to share about any processes that you did employ during the first half of the year or through July that might also be informing you of your view of how to value your own company?
In terms of our efforts around optimizing our assets, we've been on a consistent journey throughout the last couple of years. You've seen activities where we have expanded our presence in certain markets to improve our positioning, and in other places, we have exited certain markets. It's an ongoing effort here at the company. I expect in the future there will be steps taken to improve our positioning as it relates to a variety of markets and businesses that are subscale or where we see greater opportunity to enhance what we're doing. Stay tuned — we continue to pursue that effort. On the second question, there's really not much I can say. We're always looking at opportunities in the market in all different ways. Conversations with our customers inform our views on the value of our company. I can reiterate that I think today, our stock is at a price that would suggest a valuation below where we think our intrinsic value is, and that is usually why you see us lean into buying it at times like that.
Moving to our next question, Jonathan Atkin with RBC Capital Markets.
A couple of questions. One, in Latin America, one of the Brazilian carriers talked about expense controls when it comes to things like tower rent. Can you give us an update on what you're doing and how your contracts are structured to maybe prevent exposure to that, if there is anything adverse to be aware of? And then secondly, ground lease buybacks — what's going on in that segment of the market in terms of multiples, your activity level and pace? And if I can, maybe a third one, the returns that you're seeing on new tower builds.
On the LatAm question about tower rents, it's not really that different in Latin America versus our other markets in the sense that all of our customers are always looking at ways to be more efficient and to control costs, and one of those costs is their rents on towers. It's a matter of making sure what we're delivering to them is of greater value than the cost they're incurring. Generally, we're able to do that through high-quality locations, providing service and support that meets their needs and provides a better outcome than they might see from somebody else. Those cases where a site isn't needed or another alternative is more cost effective are more the exception than the rule. In terms of ground land buyouts, that's something we continue to do and have been doing for 15 to 20 years. We have a well-established function inside the company that focuses on buying out land for strategic and financial purposes. One downside to having done it well for so long is the opportunity set is a little bit smaller than in the past, particularly in places like the U.S. where we've been at it for a long time. Most of the new opportunities we see are with the new assets we've added in some other markets, including Central America, and we continue to lean into it there. We continue to find opportunities to do immediately financially accretive deals as well as secure our assets for the long term. In places like Brazil where you have pass-throughs of land costs, we're able to share some of that with our customers, and that helps reduce cost for them and makes it a better value proposition. On new tower builds, it's been tough in the U.S. to see very strong returns because we've had competition from folks willing to accept returns we weren't willing to accept. Our ability to deliver timely and do a quality job should allow us incremental opportunities over the next couple of years, and I would expect to see us do a little bit more, though I don't expect it to be overly material in the U.S. Internationally, we're building a lot of sites with great opportunities in Africa and Central America. As I mentioned in my prepared comments, as we move through the balance of the year, I would expect you'll see us build a greater number of sites each successive quarter throughout the rest of the year.
Moving to the next question in our queue, Brendan Lynch with Barclays.
Brendan, maybe just a follow-up on the direct-to-device opportunity. There was some discussion about potential additional towers, but could you scope the order of magnitude of what this opportunity might be and how it relates to either deployments on your towers specifically or maybe just using your sites for ground stations to help us understand what might be the outcome over the next couple of years?
That's a hard question to answer because of where we are in the development of those opportunities. Companies looking at direct-to-device service are still in very early stages of working out how that might work as they acquire spectrum bands and start network planning. My comments were meant to highlight what I believe will be a long-term driver of additional opportunity for our towers: anyone providing direct-to-device satellite service, if they plan to compete with existing MNOs and networks, will need a terrestrial component to deliver the quality required. If that is the case, that will be good for us because we can provide a solution that gets them to market and on air as quickly as possible. We're very early in those conversations, so it's premature to talk specifics, but I'm hopeful over the coming year or two we will have more to discuss. The bottom line is the physics and what's necessary to provide that kind of service, and I think we're well positioned to benefit from that.
Okay. Great. That's helpful. And then on the headcount reductions that we've seen at some of the U.S. carriers recently, has this altered their plans or the pace of deployments you're seeing for this year or going into 2027?
I don't know whether headcount reductions specifically have altered plans, but there has been change in leadership at a couple of larger customers and a renewed focus on cost control and reviewing how things are done. Taking a pause to refresh has had some impact on spending levels in the U.S., but I don't think it means anything significant for the long term. Network quality will continue to be critical for their future competitive positioning, and I think we're in a good position for that.
Moving to our next question, Richard Choe with JPMorgan.
I just wanted to follow up on the edge opportunity. What kind of conversations are you having? What kind of timing should we expect? Could something happen this year, or is it more for next year and the year after?
I can't give specific details at this point, but we are talking to a number of parties interested in a more disaggregated approach to compute and specifically to spread out the usage of power and related infrastructure that present challenges in the existing centralized hyperscale structure. Based on how the conversations are going, I would expect developments over the next 12 months. It's a bit premature to get into specifics, but I do feel more confident today than at any point in the past about the development of this opportunity for us.
From what you're saying, it seems like there's been a pickup in how many conversations you're having, in terms of maybe multiple parties rather than just one company.
Yes, that's true.
Moving to our next question, Cameron McVeigh with Morgan Stanley.
With the increase in the discretionary CapEx guide, how many total builds might now be expected this year and next year? And how much of that increase relates to Central America and Millicom? Secondly, could you characterize the stage of the 4G to 5G investment cycle across your international markets and where you might see the greatest remaining runway for carrier activity?
On discretionary CapEx, we're expecting roughly around 600 or so new tower builds this year. Most of those are in Central America and a reasonable amount in Tanzania as well. That's slightly up from what we previously assumed and contributes to the discretionary CapEx increase. Regarding the 4G to 5G transition across international markets, many of our markets do not have 5G service outside core urban areas, which allows opportunity for incremental spending and amendment activity to upgrade networks over the coming years. It's fairly low and well behind the U.S.; in terms of years, it's at least five years, maybe more, behind the U.S. for our average LatAm and African markets.
Moving to our next caller, David Barden with New Street Research.
This is Ryan Smyth on for Dave. Going back to the DISH lawsuit — EchoStar believes the bankruptcy code entitles them to haircut the claims by 85%. Where do you land on that? And with the escrow fund being finalized, is there anything that's come across with that that changes your view on fighting it out in court versus settling?
We vehemently disagree with their claims of the cap, and we will fight that as we currently are. We are pretty well aligned with the rest of the industry and the counterparties involved. I don't want to say too much about ongoing litigation, but I am pleased the FCC made clear that some of the games being played around the escrow fund and claims were shut down quickly by the FCC, which we appreciate. We expect to be successful in our legal pursuits and that there will be plenty of funds available within that account to meet many of the obligations we expect DISH will have to SBA.
Great. And one more: with the recent DE auction, Verizon was a winner. As they deploy that spectrum, is that within your agreements and something you'll be able to monetize?
Short answer, yes.
Moving to the next caller, Matt Niknam with Truist.
Two quick ones. First on M&A, you only acquired about six sites in the quarter, which I think is the lowest we've seen in some time. Can you talk about opportunities you're seeing on the M&A front? With the enhanced balance sheet flexibility, does that accommodate more opportunity for M&A? And secondly, how should we think about the cadence of new leasing in the U.S. in the second half of the year given the relative consistency in application volumes and activity year-to-date?
On M&A, you should expect we're looking at everything as we always have and continue to do so. The low number of sites closed in the quarter and the commentary on buybacks reflects that, primarily in the U.S. the relative valuations for the limited number of assets available in the U.S. are on average at a much higher valuation than our own company. As a result, in terms of investment, we see our stock as a much better use of capital than paying up for dilutive deals. However, opportunities still come along where we think we can add value, and I expect we'll be active in the M&A market when those arise. On the new leasing cadence in the second half, if you look at our revenue bridge in the press release and the range provided, at the midpoint of the range for new leasing contributions in the U.S., based on first half results, it implies a lesser contribution in the second half. That has been the expectation throughout the year. So nothing is different than expected. We didn't change that outlook. Based on a slowdown coming out of last year and into this year, although it's been steady this year, that flows through with it being a bit higher in the first half and a bit lower in the second half. So that's still our expectation. Nothing has changed for this year.
Moving to our next caller, Eric Luebchow with Wells Fargo.
Brendan, I think you alluded to the fact that the majority of your activity levels today are coming from colocations versus amendments. When do you think we'll start to see an uptick in amendment volumes? Is it next year with 600 megahertz for AT&T or lower C-band for T-Mobile? Or are we largely waiting for larger upcoming auctions like upper C-band next year to drive the next amendment cycle?
Each of the items you mentioned would drive more activity towards amendments because they would require either replacement of existing antennas with new radios embedded or incremental antennas added. Those are nearer-term drivers — the two items you mentioned. Longer term, some of the new spectrum bands that will come online over the coming years will also drive amendments. There's usually a cycle where you have amendments to upgrade the existing network and then more colocations as infill or densification occurs for newer spectrum bands. At this point, we're in that phase for prior deployments, including lower C-band.
Great. One follow-up: could you update us on international churn? I think you've talked about this being a peak year, but I believe there's still a chunk of Claro churn that could come. Trying to gauge timing of when international churn comes down to a more normalized level.
It's been elevated recently and probably remains elevated for a little while. We're in regular conversations with our customers, but there's been a decent amount of consolidation and even bankruptcies in some of our international markets, particularly our largest international market. That's had an impact on churn. Our focus is on working out agreements with our largest customers where we stabilize cash flow through long-term arrangements. Those agreements might include rental relief that results in some churn, but we get stabilized and reliable cash flow and can work together toward new growth opportunities as they deploy new spectrum bands. We're in the midst of that and having many of those conversations today. I don't want to commit to timing for next year, but I expect we're nearing the end of heightened international churn, mostly because we've gone through it with most customers and there are only a couple left.
Moving to our next question, Michael Ng with Goldman Sachs.
Two questions. First, with the investment-grade senior notes you issued to pay down the 2024s and the revolver, could you give a sense of what the net interest savings will be and how we should think about interest going forward? Second, in the U.S., how should we think about factors that would push you more towards a holistic master lease agreement versus an a la carte agreement as you go through those MLAs coming up over the next couple of years?
On the bond, we gave details for each tranche and the interest rates, so you can do the math on what that will be going forward. When talking about savings, we're refinancing debt that is generally less expensive or will be in the future, so it's a matter of savings against what the alternative might be. As an investment-grade issuer, we're getting a better interest rate today than we could if we weren't. There is savings, but we're in a higher interest rate environment than when some of the instruments we have coming due were put in place. Our team can walk through calculations if you need help. On wholesale MLAs versus a la carte, we're largely indifferent to structure in itself; it comes down to specific terms. We've done more wholesale MLAs recently because things have matured, there are fewer customers, and there is value in some level of certainty — price points, business flow, how we process things, and how we help customers be more efficient, which benefits us. If terms aren't in the best interest of the company or shareholders, we're fine doing it a la carte as we have done many times in the past. I would expect a situation where some carriers are on MLAs and others are on a la carte.
Moving to the next question, Nick Del Deo with MoffettNathanson.
First, Brendan, in your comments discussing satellite providers potentially deploying terrestrially, you said you're very early in those conversations. Should we take that to mean you've had exploratory discussions with satellite providers on that front?
We have talked to many satellite providers, yes.
Second, on the edge compute idea, there are various concepts of how that might be deployed — small fraction of one-megawatt deployments at many sites or single-digit megawatt mini data centers at certain sites. Are the conversations you're having skewing more towards one architecture than another?
It depends on who we're talking to. Different potential customers have different plans and expectations. On average, these would be smaller type facilities; typically not one-megawatt facilities today. Our tower sites are not set up now for that in terms of power availability specifically, but we continue to work through needs and can make adjustments and accommodations to meet customer requirements. It will continue to evolve, and we'll find the right balance between what we provide and what they need.
Moving to our next question, Aryeh Klein with BMO Capital Markets.
You have some flexibility on the balance sheet, noting you can take leverage to 7x. Would you push up to the top end of that range with share repurchases, or are you more likely to stay in the mid-6x range?
We have flexibility, and we're producing a lot of free cash flow as well. I would expect us to try to be more towards the middle of our target range over time. But if we saw an opportunity to be opportunistic around some dislocation that didn't make sense, you might see us temporarily bring leverage up a little closer to the high end.
On the edge questions, any color on the types of customers looking at it? And what percentage of your U.S. portfolio do you think could ultimately accommodate edge data centers or benefit from it?
For competitive reasons, I don't want to say too much about specific customers today, but we will talk more about it if it develops. In terms of our portfolio, roughly half of our U.S. portfolio would be well suited for the types of uses we're discussing with parties today.
That concludes all of the questions in our queue. With that, I'll turn it back over for closing comments.
Great. Well, thank you all for taking the time tonight, and we appreciate it. We look forward to reporting our third quarter results next quarter. So thank you again.
Thank you to all of our speakers, and thank you all in the audience for joining us today. With that, our call has concluded, and you may now disconnect.