Liberty Broadband Corp ((LBRDA)) has held its Q4 earnings call. Read on for the main highlights of the call.
Liberty Broadband Corp’s recent earnings call painted a picture of both triumph and challenge, with the company celebrating record revenue and strategic progress with Charter, while also grappling with operational hurdles such as a decline in adjusted OIBDA and mounting competition from Starlink. The call also emphasized a forward-looking commitment to infrastructure investment amidst a competitive landscape.
Record Revenue Achievement
GCI, a subsidiary of Liberty Broadband, achieved a significant milestone by surpassing the $1 billion revenue mark for the first time in 2024. This achievement underscores the company’s robust financial performance and strategic growth initiatives.
Revenue Growth
The company reported a 5% increase in revenue for the fourth quarter and a 4% increase for the full year, primarily driven by strong data revenue. This growth highlights the company’s successful focus on expanding its data services.
Transaction with Charter
Liberty Broadband is poised for a transformative change as it prepares to be acquired by Charter. The transaction, which has received shareholder approval, is expected to close on June 30, 2027, marking a significant step in the company’s strategic evolution.
Positive Cash Flow
Despite some challenges, GCI generated solid adjusted OIBDA and free cash flow, distributing $150 million in dividends to Liberty Broadband over the year. This positive cash flow reflects the company’s strong operational performance.
Adjusted OIBDA Decrease
The company experienced a 4% decrease in adjusted OIBDA during the fourth quarter, attributed mainly to increased SG&A expenses related to higher labor costs. This decline highlights the operational challenges faced by the company.
Subscriber Decline
GCI Consumer reported a decline in subscribers, with a loss of 300 wireless subscribers and 4,900 cable modem subscribers, primarily due to the expiration of the ACP program. This decline signals a need for strategic adjustments in subscriber retention.
CapEx Shortfall
Capital expenditures for 2024 were slightly below expectations at $193 million, due to delays in rural fiber projects. This shortfall indicates challenges in executing infrastructure projects on schedule.
Competitive Pressure from Starlink
GCI faced competitive pressure from Starlink, losing wired subscribers in rural areas due to service disruptions caused by multiple breaks in the backbone fiber. This competition underscores the challenges of maintaining service reliability in rural markets.
Forward-Looking Guidance
Looking ahead, Liberty Broadband has announced plans to spin off GCI before its acquisition by Charter, with the transaction expected to close by mid-2027. The company projects an increase in capital expenditures to $250 million in 2025, focusing on enhancing rural connectivity. Additionally, Charter’s commitment to repurchasing $100 million of its stock monthly aims to reduce Liberty Broadband’s $3.7 billion debt.
In conclusion, Liberty Broadband Corp’s earnings call reflects a mixed sentiment of achievement and challenge. While the company celebrates record revenue and strategic advancements, it also faces operational hurdles and competitive pressures. The forward-looking guidance suggests a continued focus on strategic investments and debt reduction, setting the stage for the company’s future growth and stability.