Release Date: May 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Liberty Broadband Corp (LBRDA, Financial) expects to resume sales into Charter's buyback this summer, with a focus on debt reduction in the near term.
- Charter experienced solid EBITDA growth of 2.8% in Q1, with management confident in achieving EBITDA growth throughout the year despite industry pressures.
- Charter's mobile segment continues to perform well, surpassing 8 million total mobile lines with a 38% increase in mobile service revenue compared to the previous year.
- Liberty Broadband Corp (LBRDA) reported a consolidated cash and cash equivalents of $108 million at quarter end.
- GCI paid down its revolver by $60 million during the quarter using strong cash from operations, demonstrating effective cash management.
Negative Points
- Charter experienced a 72,000 subscriber net loss in Q1, largely due to increased competition and early headwinds from the upcoming ACP expiration.
- The ACP (Affordable Connectivity Program) was not renewed, posing challenges in retaining ACP customers despite alternative offers.
- GCI's revenue and adjusted OIBDA were flat in Q1, with growth in data revenue offset by declines in other revenue segments, particularly in video revenue.
- Liberty Broadband Corp (LBRDA) faces a reduced pace of buyback in the near term due to a greater focus on debt reduction.
- The broader NAV discount for Liberty Broadband Corp (LBRDA) remains a concern, with the market showing a reduced appetite for arbitrage opportunities.
Q & A Highlights
Q: Greg, regarding Charter, is there any hope for an ACP Extension Act given the recent bipartisan support in the Senate?
A: Gregory B. Maffei - Liberty Broadband Corporation - CEO, President & Director: While there is bipartisan support, procedural issues could impede its progress. We cannot rely on it, but there is always hope.
Q: Given the current high interest rates, would it be more beneficial for Charter to focus on deleveraging rather than stock buybacks?
A: Gregory B. Maffei - Liberty Broadband Corporation - CEO, President & Director: We plan to use more of Charter's buyback proceeds for debt reduction at Liberty Broadband, and Charter is expected to reduce its leverage to the midpoint of its target range.
Q: Should Charter consider slowing its footprint expansion to free up cash for larger share repurchases, especially given the current valuation of EBITDA?
A: Gregory B. Maffei - Liberty Broadband Corporation - CEO, President & Director: Charter is being more thoughtful about expansion given market preferences for free cash flow. However, they maintain a balanced approach to growth and capital allocation.
Q: With mobile being a growth area for Charter, is there scope to invest more aggressively in this segment to enhance its material impact on the business?
A: Gregory B. Maffei - Liberty Broadband Corporation - CEO, President & Director: Charter is already aggressively pursuing mobile growth. Current market conditions limit further acceleration, but continued success in mobile is anticipated.
Q: Considering the depressed valuations for cable assets, is there an opportunity for Liberty Broadband to consider acquiring other cable companies?
A: Gregory B. Maffei - Liberty Broadband Corporation - CEO, President & Director: While not closed to opportunities, synergies with Charter generally make it more advantageous to pursue acquisitions through Charter rather than directly by Liberty Broadband.
Q: What strategies are being considered to address the NAV discount at Liberty Broadband?
A: Gregory B. Maffei - Liberty Broadband Corporation - CEO, President & Director: The primary strategy is share repurchases at discounted prices. Long-term mitigation might involve structural changes similar to previous consolidations with other entities.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
