Liberty Latin America (LILA) Q3 2024 earnings summary

Executive summary

• Added over 50,000 high-speed broadband and postpaid mobile subscribers year to date, with 225,000 adds excluding Puerto Rico, which is recovering from migration challenges and subscriber churn.

• Q3 2024 revenue was $1.1 billion, down 3% year-over-year, with sequential financial improvement and expectations for accelerated performance in Q4.

• Reported operating loss of $380 million for Q3 2024, driven by a $511 million goodwill impairment at Liberty Puerto Rico and lower revenue in key segments.

• Strategic investments include FTTH in Peru, new pan-regional subsea cable, and acquisition of spectrum and subscribers from Echostar.

• C&W Caribbean showed resilience despite Hurricane Beryl, while Puerto Rico's recovery is ongoing but slower than anticipated.

Financial highlights

• Q3 2024 revenue: $1.09 billion (down 3% year-over-year); Adjusted OIBDA: $403 million (down 6% year-over-year, up 4% sequentially); Adjusted OIBDA margin: 37.0%.

• Net loss attributable to shareholders: $436 million for Q3, mainly due to goodwill impairment in Puerto Rico.

• Adjusted free cash flow in Q3: $66 million, up from $33 million in Q3 2023.

• Gross leverage at 5.2x and net leverage at 4.8x, with $8.2 billion total debt and $600 million cash at quarter end.

• Q3 P&E additions were $171 million (16% of revenue), with 52% allocated to new build, upgrade, CPE, and capacity.

Outlook and guidance

• Q4 expected to deliver strongest cash flow generation of the year, driven by B2B growth and Puerto Rico recovery.

• Hurricane Beryl expected to negatively impact Q4 revenue and Adjusted OIBDA by $5–10 million, with full-year impact at the high end of $10–20 million.

• No longer expecting to achieve monthly Adjusted OIBDA of $45 million in Puerto Rico by year-end due to slower recovery.

• Commercial recovery in Puerto Rico will require investments in 2025, with cost cuts and improved platforms expected to drive future OIBDA expansion.

• Transaction to combine Costa Rica operations with Millicom expected to close in H2 2025, with Liberty Latin America holding 86% and Millicom 14%.