Liberty Broadband Corporation Q1 FY2026 earnings call

• Announced a definitive agreement to acquire Quintillion for $310 million in cash subject to certain adjustments, etc., expecting the transaction to be accretive to free cash flow in the first year after closing.
• Invested approximately $107 million to acquire Searchlight Capital Partners' equity interest in Liberty Latin America and in discussions to acquire additional shares, intending to change name to Liberty Capital Corporation.
• Grew consumer wireless subscribers 2% year over year, ending the quarter with 200,000 consumer wireless lines; data subscribers declined 3% year-over-year, but broadband losses pace is decreasing.
• Operating priorities: invest in network infrastructure including acquiring Quintillion, complete build-out commitments under Alaska Plan, drive value and convergence for customers, bridge digital divide through rural expansion.

For the first quarter, GCI generated total revenue of $256 million, a 4% year-over-year decrease. Adjusted EBITDA was $93 million, an 18% year-over-year decrease. Consumer revenue declined 5% during the first quarter, with the majority of the decline driven by the shutdown of the video business and data subscriber losses, slightly offset by wireless growth. Consumer gross margin increased to 72.2% for the quarter due to a decline in consumer direct costs from decreases in video programming costs. Business revenue declined 3% for the first quarter. Excluding approximately $4 million of out-of-period revenue, revenue would have been flat. Business gross margin decreased to 77.3% for the first quarter primarily due to higher distribution costs related to restored service on the Quintillion fiber network.

• Expect 2026 CapEx of approximately $290 million, with 2026 expected to be peak year of CapEx spent and then step down to historical range of 15% to 20% of revenue.
• Planned Quintillion acquisition expected to be accretive to free cash flow in the first year after closing.

• Actual events or results could differ materially from forward-looking statements due to a number of risks and uncertainties, including those mentioned in the most recent forms 10-K and 10-Q filed by GCI Liberty and Liberty Broadband with the SEC.
• Uncertainties related to the acquisition of Quintillion such as adjustments, reimbursement of capital expenditures, and potential earn-out payments.
• Uncertainties related to the investment in Liberty Latin America.

Q: On the operational side with the business wireless losses, what were the drivers of that?

A: Business wireless is a small part, with ordinary churn, gradually descending partly as people transition business accounts more to the consumer side.

Q: Should we think of the Liberty Latin American investments as a tax-advantaged cash flow place?

A: Think there's a more strategic thrust, believe Liberty Latin America is undervalued with characteristics similar to Alaska market and on the verge of substantial inflection in free cash flow.

Q: What were your payments to Quintillion last year? And have there been other fiber breaks in the past like you experienced last year? And who are the remaining customers?

A: Not broken out total Quintillion payments; customer base for Quintillion includes other people providing services largely to schools and healthcare providers like ACS and smaller local telephone companies.

Q: Outside of the repurchases that Liberty Broadband is making of charter stock from Liberty every month, why wouldn't Liberty Broadband be encouraging a charter to reduce their debt in absolute terms?

A: For the Cox transaction, there will be a reduction in net leverage, and they remain supportive of the cap allocation policy at the company and see them lowering their leverage at the close of the Cox transaction