Liberty Broadband Corp serves in the telecommunications industry in the United States. It provides cable services to both residential and small to medium businesses through its fiber, hybrid fiber, and coaxial cable infrastructure. The services provided by the company include video, internet, voice, and mobile services for residential customers, as well as business and enterprise solutions, advertising services, and other services for commercial clients. The reportable segments of the company are GCI Holdings and Charter, with the majority of revenue derived from GCI Holdings.
Performance Overview
Liberty Broadband Corp (LBRDA, Financial) reported total revenue of $246 million for Q2 2024, slightly above the analyst estimate of $243.70 million. However, the company reported earnings per share (EPS) of $2.45, falling short of the estimated $2.52.
GCI Holdings, a significant segment of Liberty Broadband, reported flat revenue at $246 million compared to the same period last year. Consumer revenue remained unchanged, with growth in data services offset by declines in wireless revenue. Business revenue saw a modest increase of 1%, driven by growth in data services, partially offset by declines in wireless and other revenue.
Financial Achievements and Challenges
Liberty Broadband's operating income decreased to $21 million from $23 million in the same quarter last year. Adjusted OIBDA also saw a decline, dropping to $80 million from $87 million. The decrease in operating income and Adjusted OIBDA was primarily due to higher operating costs, including increased distribution costs to healthcare customers and higher labor-related expenses.
Despite these challenges, Liberty Broadband managed to reduce its debt by $43 million in the second quarter. The company repaid $150 million of borrowings under the Charter margin loan, partially offset by additional borrowing under GCI’s senior credit facility.
Key Financial Metrics
| Metric | Q2 2023 | Q2 2024 |
|---|---|---|
| Total Revenue | $245 million | $246 million |
| Operating Income | $23 million | $21 million |
| Adjusted OIBDA | $87 million | $80 million |
Balance Sheet and Cash Flow
As of June 30, 2024, Liberty Broadband reported consolidated cash of $73 million, down from $108 million as of March 31, 2024. The decrease in cash was primarily due to net debt repayment and capital expenditures. The company's total debt decreased to $3.609 billion from $3.639 billion in the previous quarter.
Liberty Broadband's investment in Charter, accounted for using the equity method, increased to $13.73 billion from $13.385 billion. The company also reported an increase in GCI Holdings' debt to $1.131 billion from $1.024 billion, with GCI's leverage ratio increasing to 3.2x from 2.8x.
Commentary
"Liberty Broadband's financial performance in the second quarter reflects the ongoing challenges in the telecommunications industry, including increased operating costs and competitive pressures. However, the company's strategic debt reduction and continued investment in high-returning projects position it well for future growth," said Shane Kleinstein, Liberty Broadband's spokesperson.
Conclusion
Liberty Broadband Corp (LBRDA, Financial) faced a challenging second quarter with flat revenue growth and increased operating costs. However, the company's strategic debt reduction and continued investment in key projects demonstrate its commitment to long-term growth. Investors will be keen to see how Liberty Broadband navigates these challenges in the coming quarters.
Explore the complete 8-K earnings release (here) from Liberty Broadband Corp for further details.
