Liberty Broadband Corporation

Welcome to the GCI Liberty 2025 Year-End Earnings Call. During the presentation, all participants will be in listen-only mode. Afterwards, we'll conduct a question-and-answer session. At that time, if you have a question, please press star 1 on your telephone. As a reminder, this conference will be recorded February 11th. I would now like to turn the call over to Hooper Stevens, Senior Vice President of Investor Relations. Please go ahead. Good morning. Thank you for joining us.

This call includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in the most recent forms 10-K, followed by GCI Liberty and Liberty Broadband with the SEC. These forward-looking statements speak only as of the date of this call, and GCI Liberty and Liberty Broadband expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in GCI Liberty or Liberty Broadband's expectations with regard thereto to or any change in events, conditions, or circumstances on which such statement is based. On today's call, we will discuss certain non-GAAP Financial measures for GCI Liberty, including adjusted OIPDA, adjusted OIPDA margin, and free cash flow. Information regarding the required definitions, along with the comparable gap metrics and reconciliations, including Schedule 1 and Schedule 2 for GCI Liberty, can be found in the earnings press release issued today, which is available on GCI Liberty's IR website. Speaking on today's call will be Ron Duncan, the CEO of GCI Liberty, and Brian Wendland, GCI Liberty's Chief Accounting and Principal Financial Officer. Also, during the Q&A, we will take questions related to Liberty Broadband should they arise. Additional members of GCI and Liberty Broadband Management will be available to assist Ron and Brian with questions. With that, I'll hand the call over to Ron Duncan.

Thank you, Hooper, and good morning. GCI had an exceptional year. We reported solid fourth quarter results, achieved record revenue of over $1 billion, and record adjusted EBITDA of more than $400 million, a significant milestone for the company. We continue to execute on our mission to deliver best-in-class connectivity across Alaska. Our consumer wireless base is expanding, and we are realizing the benefits of last year's strong sales cycle in our business segment. We continue to sharpen our strategic focus as Alaska's only converged broadband and wireless provider following the exit of our video business last year. During the fourth quarter, we announced, executed, and completed our rights offering. The rights offering was fully subscribed, resulting in approximately 300 million in net proceeds. We are pleased with the outcome, which allows us ample flexibility to continuously canvas the market and fine-tune our strategy at the parent company level. We plan to use the proceeds for general corporate purposes, as well as for potential strategic acquisitions, investments, or partnerships. Turning to the business, I'm proud of how nimble and effective our GCI team is in ensuring the continuity of our network. First, in December, we experienced two fiber breaks, one in Dutch Harbor, which was repaired in early January in under two weeks, and the other in Deering. We expect to incur repair costs this year in the low single-digit million range, with service expected to be restored at Deering during the summer months after the ice goes out. Second, as we mentioned last quarter, Typhoon Halong hit Southwest Alaska in early October of last year. We fully restored service to the two villages that were hit in under four months. Beyond a small revenue overhang in January, we did not expect any ongoing impact to our business. We commend the entire GCI team for their outstanding service to the communities that we serve. Turning now to our operating highlights, we grew consumer wireless subscribers 2% year-over-year and in the year with 199,000 consumer wireless lines. We had a total of 207,500 wireless lines at year end, including 8,500 business lines. We added 3,500 consumer wireless lines during the year, including 6,700 post-paid lines, largely as a result of our unlimited test drive promotion. We continue to see slow erosion in our prepaid and government-subsidized lifeline segments, partially offsetting the growth in our post-paid lines. On the data side, we saw a 3% decline year over year, exiting the year with 151,200 data subscribers. We lost 4,500 data subscribers during the year and 1,200 data subscribers during the fourth quarter. The decline of data subscribers over the past year is due to wireless substitution and limited competition from Starlink and others, exacerbated by a fiber break on a third-party network in which GCI uses capacity. As of the third quarter, service has been restored, although we note that winning back customers in the service impacted areas has been slow. We are proud of the operational and financial progress we made in 2025. We reported over 400 million of adjusted EBITDA, an exceptional milestone for GCI. But looking ahead to this year, we expect the business to be stable. As we look forward to 2026, our operating priorities are First, to invest in our network infrastructure and deliver high-quality service to our customers. Second, to complete our build-out commitments under the Alaska plan. Third, to drive value and the benefits of convergence for our customers. And fourth, to continue bridging the digital divide through our rural expansion. Starting with our network infrastructure. We're offering two and a half gigabit broadband connectivity everywhere that has fiber middle mile, which means we can offer it to an overwhelming majority of our customers. We're making progress improving the broadband network in Anchorage. We're in the process of upgrading the core, reducing node sizes, and upgrading to a 1.8 gigahertz plant. Our initial deployment is yielding positive results, and we plan to significantly scale the deployment of our HFC network this year. All the work that we are doing is DOCSIS 4.0 or 4.0 capable, enabling speeds that are multiple times what we have today. We will be rolling this out to markets outside of Anchorage this year, allowing us to get to 5 gigabits and ultimately beyond. We believe these changes will not only lead to higher speeds, but also a network with better reliability and fewer maintenance requirements. The strength of this offering positions us well against competitors today and into the future. Next on driving convergence and maximizing value and quality for our customers, we concluded our unlimited test drive promotion at year end, which drove meaningful postpaid consumer wireless growth in 2025 to a peak of 165,400 lines. The first cohorts of our promotional subscribers are now rolling off. And while it's still early, we are seeing exceptionally strong retention rates. At the end of January, we launched a 12-month free promotion that we expect will further support postpaid wireless growth this year. As of year end, approximately 40% of our broadband customers have one or more wireless lines, and approximately 62% of our postpaid wireless lines are sold as part of a bundle, up from 57% at the end of 2024. Our focus remains on delivering quality and value for all of our customers. Lastly, on bridging the digital divide in Alaska, through expansion and completing our build commitments on the Alaska plan. Just a few weeks ago, we announced that we had completed the build-out of the IHUC-1 network, which brings fiber infrastructure to the Yukon-Kuskokwim Delta, ensuring residents there enjoy 2.5 gigabit service. We also remain on track to complete our build-out requirements for the Alaska plan this year, and increase wireless speeds in the communities we serve. The new Alaska Connect Fund will extend the Alaska plan to 2034. Our focus remains on providing 5G wireless service to all covered Alaskans over the coming years. Turning briefly to BEAD, the state of Alaska has announced that GCI has been provisionally awarded approximately $120 million in BEAD funding. This award remains subject to approval by the NTIA. There remains substantial uncertainty about the timing of the final awards as the state is still in active negotiations with the NTIA regarding the ultimate distribution of Alaska's bead funding. Any funding that GCI ultimately receives will offset our capital costs as we expand in unserved locations. Regulatory and macro environment. From a macro perspective, Alaska's economy could be poised for some long overdue economic growth. In mid-October, the Trump administration announced plans to open the Arctic National Wildlife Range to drilling, a development that could accelerate oil and gas activity across the state. Combined with the potential development of a gas line, these initiatives could drive substantial economic expansion in Alaska, lifting the Alaska economy and creating new opportunities with the potential of increased demand for our services. In summary, We are encouraged by an exceptional year of financial and operational performance. The peak of CapEx in 2026 and projected step down over the coming years back to our historical range of 15% to 20% of revenue should be highly supportive of substantial cash generation as we look ahead. We believe the strength of our network and our robust operating results will continue to create value for our customers, partners, and shareholders. With that, I'll turn it to Brian to discuss the financials in more detail.