Liberty Broadband Corporation Q1 FY2025 earnings call

• Acquisition of Liberty Broadband by Charter was approved by shareholders on February 26, expected to close June 30, 2027.
• Liberty Broadband remains on track to spin off GCI this summer, with amended S1 filed yesterday. Once spinoff is complete, GCI Liberty will handle its own earnings process.
• At quarter end, Liberty Broadband had consolidated cash and restricted cash of $565 million, including $149 million at GCI; $338 million of restricted cash was from Charter Share sales for debt service.
• GCI's first quarter saw revenue of $266 million and adjusted OIBDA of $111 million, driven by data revenue and business; $4 million benefit from successful appeal of rates for healthcare customers.
• Quintillion Fiber in Beaufort Sea failed, disrupting consumer and enterprise services, with partial restoration but full repair expected late summer.
• GCI refinanced its senior credit facility with a 450 million revolver maturing in 2030 and $300 million Term Loan A maturing in 2031.
• GCI spent $49 million on CapEx in Q1 net of grant proceeds, with 2025 CapEx expected at $250 million for rural Alaska connectivity, elevated in 2025 and 2026 due to Alaska Plan.
• Work ongoing on Universal Service Fund matters, including Supreme Court argument and potential legislative solutions; contingency plans in place.
• GCI completed connecting Bethel with fiber from Anchorage, expecting to launch residential services in May with 5G wireless and 2.5 gigabits unlimited broadband.

GCI's first quarter of 2025 was its best ever with revenue of $266 million and adjusted OIBDA of $111 million, up 9% and 23% respectively over the prior year. Adjusted OIBDA margin was 42%. Revenue contribution breakdown wasn't explicitly detailed beyond GCI's overall performance.

• Acquisition by Charter expected to close on June 30, 2027.
• GCI spinoff expected to occur this summer.
• GCI Liberty plans to host a virtual investor event prior to the spinoff to provide more info on the GCI business.

• Quintillion Fiber in Beaufort Sea failure disrupted services, with consumer services partially restored but expected to have degraded service until late summer for full repair.
• Uncertainty surrounding the Universal Service Fund due to Supreme Court case challenging its constitutionality, with work ongoing on potential legislative solutions and contingency plans in place.

Q: A few on GCI. As investors dig into the GCI Liberty opportunity, maybe you could help us think about the business and whether you might see a need to shift the broader operating and pricing strategy? Or is there really no need in the near future given the current momentum that you have and the outlook that you see ahead? And secondly, are you seeing any changes in consumer or business customer behaviors due to the ongoing macro uncertainty more broadly, or have trends remained relatively stable given the different profile of the Alaskan market and economy?

A: Okay, let me take those in reverse order and deal with any changes in behavior first. We're pretty much seeing a flat marketplace. We're seeing a little bit of competition from Starlink around the edges. I think that's probably our equivalent of the fixed wireless competition that the companies in the lower 48 are experiencing, but no real changes on the broadband front and slow but steady growth on the consumer wireless front. With respect to the broader strategy, it's important to remember how much of GCI is really enterprise services. Consumer services are the minority of the company's revenue and OIBDA. The bulk of the company's revenue and OIBDA come from enterprise services provided to healthcare corporations and schools in rural Alaska and the largest enterprise customers in the state. On the consumer market front, we are in tune with the rest of the industry looking at ways to both differentiate and further solidify the customer proposition that's received by GCI. We've been very heavily focused, like Lower 48 companies, on bundling wireless with broadband. We're a little different than the Lower 48 in that we own our own wireless network. We're not an MVNO, we're an M&O. And we're right now reevaluating our pricing and product mix to see what we could do to increase the stickiness for customers but we haven't experienced the level of competition that companies in the Lower 48 have. And we're probably not as advanced as they are in terms of fully integrated packages of services that go beyond just the wireless and the broadband, but we're moving in that direction.