Liberty Broadband (LBRDA) Q2 2024 earnings summary

Executive summary

• Issued $860 million of 3.125% exchangeable senior debentures due 2054, repaid $540 million under the Charter margin loan, and repurchased $300 million of 2053 debentures, extending maturities and expecting substantial interest savings.

• GCI revenue was flat at $246 million in Q2 2024, with operating income of $21 million and Adjusted OIBDA down 7% to $80 million compared to Q2 2023.

• Charter reported strong results despite a net broadband subscriber loss of 149,000, mainly due to the ACP program expiration, with improving trends through the quarter.

• Liberty Broadband repurchased 1.1 million shares of Series C common stock for $89 million in H1 2024; $1.7 billion remains authorized for buybacks.

• TripAdvisor continues to face pressure in hotel meta and brand segments but is seeing early positive results from strategic initiatives, with Viator and TheFork increasing their profit contributions.

Financial highlights

• Q2 2024 revenue: $246 million (Q2 2023: $245 million); net earnings: $195 million (Q2 2023: $252 million); Adjusted OIBDA: $80 million (Q2 2023: $87 million); operating income: $21 million (Q2 2023: $23 million).

• Cash and cash equivalents were $73 million as of June 30, 2024; total principal debt was $3.73 billion at quarter end.

• Charter investment valued at $16.2 billion as of August 1, 2024; Liberty Broadband maintained a 26% fully diluted equity interest in Charter.

• GCI distributed $150 million to Liberty Broadband, funded by cash and revolver draw, used to pay down the Charter margin loan.

• Charter's share of earnings for Q2 2024 was $297 million (Q2 2023: $318 million).

Outlook and guidance

• Charter expects continued one-time impacts on customer net gains, revenue per customer, and bad debt in the second half of 2024 due to the end of the ACP.

• GCI's net capital expenditures for full year 2024 are expected to be approximately $200 million, focused on network expansion in rural Alaska.

• GCI Holdings anticipates continued pressure from inflation and Alaska's economic volatility, with potential impacts on demand and margins.

• Projected uses of cash for the remainder of 2024 include share buybacks, $80 million in capital expenditures, $100 million in interest payments, and $5 million in preferred stock dividends.

• Charter aims to further reduce leverage toward the middle of its 4x-4.5x target range.