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Liberty Broadband Corp (LBRDA)·Q1 2025 Earnings Summary

Executive Summary

  • Liberty Broadband’s Q1 2025 revenue was $266.0M, up 9% year over year and slightly above Q4 2024 ($263.0M), with consolidated operating income of $43.0M and Adjusted OIBDA of $99.0M; diluted EPS was $1.87 .
  • The quarter featured significant corporate actions: sale of 830K Charter shares for $300M, issuance of a redemption notice for $860M of 3.125% exchangeable debentures due 2054 (cash settle expected by May), and increased restricted cash dedicated to deleveraging .
  • GCI delivered its best quarter ever: revenue $266M (+9%), operating income $56M (+51%), Adjusted OIBDA $111M (+23%), with margin expansion driven by business data and temporary distribution cost savings amid a third-party fiber outage; net 2025 capex guide maintained at ~$250M .
  • Wall Street consensus revenue for Q1 2025 was ~$248.6M vs. actual $266.0M, a beat; EPS consensus was not available* .
  • Near-term catalysts: progress on the GCI spin-off (amended S-1 filed, investor event scheduled), execution on fiber resilience and rural network expansion, and clarity on USF regulatory developments .

What Went Well and What Went Wrong

What Went Well

  • Record quarter: “The first quarter of 2025 was GCI's best quarter ever with revenue of $266 million and adjusted OIBDA of $111 million, up 9% and 23%... Adjusted OIBDA margin was 42%.”
  • Business momentum: GCI Business revenue grew 13% YoY to $145M, led by data (+19%) on continued upgrade cycles in schools and healthcare in remote Alaska since Q3 2024 .
  • Balance sheet actions/liquidity: $300M proceeds from Charter share sales, redemption of $860M debentures, and GCI refinancing (new $450M revolver to 2030 and $300M TLA to 2031) with undrawn capacity of $292M; consolidated cash and restricted cash rose to $565M .

What Went Wrong

  • Consumer pressure: Cable modem subscribers fell to 155.8K (-2.5% YoY) and wireless subs declined on prepaid/Lifeline; ACP expiration drove broadband churn .
  • Service disruption: A second Quintillion undersea fiber failure (Jan 18) degraded consumer service; partial restoration via LEO satellite and rerouting, full repair expected late summer .
  • Competitive encroachment: Starlink gained share in rural areas during fiber outages; management views urban risk as limited but expects satellite participation in future grant programs .

Financial Results

Consolidated Results vs Prior Periods and Estimates

MetricQ1 2024Q4 2024Q1 2025Consensus (Q1 2025)
Revenue ($USD Millions)$245 $263 $266 $248.6*
Operating Income ($USD Millions)$28 $13 $43 —
Adjusted OIBDA ($USD Millions)$85 $69 $99 —
Diluted EPS ($USD)$1.69 — (not disclosed)$1.87 N/A*

Values marked with * retrieved from S&P Global.

Notes:

  • Revenue beat vs consensus by ~$17.4M (~7.0%); EPS consensus unavailable* .
  • Sequential revenue modestly higher; operating income and Adjusted OIBDA rose significantly YoY and vs Q4 .

GCI Segment Breakdown (Financials)

Segment / MetricQ1 2024Q1 2025
Consumer Data Revenue ($M)$60 $61
Consumer Wireless Revenue ($M)$47 $50
Consumer Other Revenue ($M)$10 $10
Consumer Total Revenue ($M)$117 $121
Business Data Revenue ($M)$108 $128
Business Wireless Revenue ($M)$12 $10
Business Other Revenue ($M)$8 $7
Business Total Revenue ($M)$128 $145
GCI Total Revenue ($M)$245 $266
GCI Operating Income ($M)$37 $56
GCI Adjusted OIBDA ($M)$90 $111

Margins (GCI)

MarginQ1 2024Q4 2024Q1 2025
Operating Income Margin (%)15.1% 13.3% 21.1%
Adjusted OIBDA Margin (%)36.7% 32.7% 41.7%

KPIs (GCI)

KPIQ1 2024Q1 2025
Cable Modem Subscribers159,800 155,800
Wireless Lines in Service199,000 202,300

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Capital Expenditures (GCI)FY 2025~$250M (investments in middle/last mile, Bethel & AU-Aleutians fiber projects) ~$250M (investments in rural Alaska networks; Alaska Plan build-out) Maintained
Credit Facility (GCI)OngoingRevolver $550M due Oct 2026; TLA $250M due Oct 2027 (pre-refi context) Revolver $450M due Mar 2030; TLA $300M due Mar 2031; $292M undrawn capacity (net) Refinanced/Extended
Exchangeable Debentures (Corporate)2054Outstanding $860M due 2054 Redemption notice issued; redeemed/exchanged with cash settlement by May 2025 Deleveraging action
Preferred Dividend (LBRDP)Q3 2025 payable July 15Quarterly dividend pattern$0.43750001 per share; record date June 30, 2025 Declared
Spin-off (GCI)Summer 2025Expect late Q2/early Q3 completion; taxable to LBRDA/holders; Charter to bear corporate tax On track; amended S-1 filed; investor event June 3, 2025 Timeline reaffirmed

Earnings Call Themes & Trends

TopicQ3 2024 (Q-2)Q4 2024 (Q-1)Q1 2025 (Current)Trend
Spin-off & Charter transactionInitiated combination discussions; ownership maintenance; debt actions Shareholder approval; exchange ratio 0.236; spin-off late Q2/early Q3; Charter to bear corporate tax Amended S-1 filed; on-track summer spin; investor event scheduled Progressing; governance certainty
Fiber resilience/outageNoted project execution in rural Alaska Rural focus; capex plan Quintillion fiber failure; partial restoration via LEO/rerouting; full repair late summer Operational risk managed; temporary cost benefit
Starlink competitionLimited mentionDeep dive: rural share gains during outages; urban risk low; satellite in grants “Edges” competition; strategic bundling; MNO position Contained; planning for grant landscape
Capex trajectoryFY24 ~$200M; rural expansion FY25 ~$250M; Alaska Plan build-outs FY25 ~$250M maintained; $49M net in Q1 Elevated through 2026; then normalize
USF regulatory/legalNot highlightedSCOTUS case; low probability of adverse material change; contingency plans Reiterated confidence; legislative contingency Watching risk; prepared
Enterprise-led growthBusiness data strength +16% Continued strength; full-year above $1B revenue Business +13% YoY; school/health care upgrades Sustained driver

Management Commentary

  • “The first quarter of 2025 was GCI's best quarter ever with revenue of $266 million and adjusted OIBDA of $111 million, up 9% and 23%... Adjusted OIBDA margin was 42%.” — Ron Duncan
  • “We connected Bethel… residents will have access to a 5G wireless network and 2.5 gigabits unlimited broadband service under the same pricing plans as Anchorage.” — Ron Duncan
  • “Liberty Broadband had consolidated cash and restricted cash of $565 million… $338 million of restricted cash… proceeds from Charter share sales to be used towards debt service.” — Ben Oren
  • “Liberty Broadband issued a redemption notice for all of its 3.125% debentures due 2054 for cash… expected to be cash-settled in May 2025.” — Ben Oren
  • “The acquisition… was approved… transaction is expected to close on June 30, 2027… Liberty Broadband remains on track to complete the spin-off of the GCI business this summer.” — Brian Wendling

Q&A Highlights

  • Pricing and go-to-market strategy: Management is focusing on bundling wireless and broadband, leveraging GCI’s MNO status, and reevaluating pricing/product mix to increase stickiness; competitive intensity is materially lower than Lower 48 .
  • Macro trends: Market seen as “flat,” with modest consumer wireless growth; Alaska’s enterprise-heavy mix supports stability .
  • Clarifications: Only one analyst question in Q1; broader regulatory and competitive context (USF, Starlink) discussed extensively in prior quarter’s Q&A and reiterated in prepared remarks this quarter .

Estimates Context

  • Revenue beat: Actual $266.0M vs S&P Global consensus $248.6M*, driven by strong business data revenue and temporary cost savings related to distribution expense; sequential trend positive vs Q4 ($263.0M) .
  • EPS consensus: Not available*; reported diluted EPS $1.87 .
  • Potential estimate revisions: Upward bias to near-term OIBDA on business mix shift and cost tailwinds, with caution as fiber outage-related savings are temporary and consumer churn persists due to ACP expiration; capex trajectory (~$250M in 2025) remains elevated .
    Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Strong execution with a clear beat on revenue versus consensus and material margin expansion at GCI; near-term OIBDA profile improving though aided by temporary cost savings .
  • Deleveraging roadmap is credible: recurring proceeds from Charter repurchases, redemption of 2054 debentures, and growing restricted cash earmarked for debt service .
  • Spin-off of GCI remains a key catalyst for value clarity and governance simplification ahead of the Charter transaction; investor event scheduled for June 3 .
  • Structural enterprise demand (schools/health care) continues to anchor growth; monitor rural consumer dynamics amid ACP expiration and Starlink’s opportunistic gains during outages .
  • Elevated capex through 2026 aligns with network expansion under Alaska Plan; expect normalization thereafter, supporting future FCF trajectory .
  • Regulatory watch: USF case at SCOTUS; management prepared with contingency plans, base case expects limited disruption .
  • Trading implications: Positive momentum and corporate de-risking could support multiples into the spin; headline sensitivity around fiber repair timeline, USF outcomes, and consumer churn should be monitored closely .