Liberty Broadband's Strong Q1 2025 Performance: Record-Breaking Quarter for GCI Amid Acquisition and Spin-Off Plans
Liberty Broadband kicked off its Q1 2025 earnings call with a bang, boasting impressive numbers across various fronts. As the company navigates the complex landscape of an impending acquisition by Charter and the spin-off of its GCI business, Liberty Broadband has managed to deliver a record-breaking quarter for GCI.
The first quarter of 2025 was indeed a milestone moment for GCI, with revenue soaring to $266 million – a 9% increase over the previous year. Moreover, adjusted operating income before depreciation and amortization (OIBDA) jumped by 23% to $111 million, marking another all-time high for the company. This remarkable growth can be attributed primarily to data revenue and business, which have benefited from the strong upgrade cycle in school and health care services in rural Alaska.
Liberty Broadband's Chief Accounting Officer, Brian Wendling, provided an update on the pending acquisition by Charter during the call, stating that the transaction is still expected to close on June 30, 2027. The company remains on track to complete the spin-off of its GCI business this summer, with a virtual investor event planned prior to the spin-off to provide additional information on the GCI business.
Ben Oren, Executive Vice President and Treasurer, took over from Brian Wendling to delve into Liberty Broadband's balance sheet. The company had consolidated cash and restricted cash of $565 million as of quarter end, with a significant portion – $338 million – consisting of restricted cash representing proceeds from Charter share sales to be used towards debt service.
The exchange ratio is fixed in the Charter and Liberty Broadband transaction, effectively creating a lockbox structure between the two companies until the transaction's close. This lockbox structure ensures that tax-free proceeds from Charter share sales are directed toward deleveraging at Liberty Broadband until the transaction's completion. In March, Liberty Broadband issued a redemption notice for all of its 3.125% debentures due 2054, with the option to redeem them in cash or exchange and settle them later this year.
GCI itself has been busy refinancing its senior credit facility, securing a $450 million revolver that matures in 2030 and a $300 million term loan A that matures in 2031. As of quarter end, GCI's leverage as defined by its credit agreement was 2.8x, with a substantial $292 million of undrawn capacity net of letters of credit.
The value of Liberty Broadband's Charter investment, based on the shares held as of May 1 and yesterday's close, stands at an impressive $17.8 billion. Meanwhile, Liberty Broadband's total principal amount of debt as of quarter end was a substantial $3.7 billion – excluding preferred stock.
The conference call concluded with Ron Duncan, CEO of GCI and CEO of GCI Liberty following the spin-off, sharing his excitement about the company's performance in Q1 2025. As Liberty Broadband embarks on this new chapter, it remains to be seen how these developments will shape its future and that of its subsidiary, GCI.
