Liberty Latin America(LILA) - 2025 Q1 - Quarterly Results

Executive Summary This section provides an overview of Liberty Latin America's Q1 2025 financial and operational performance, along with key management commentary and outlook Q1 2025 Performance Highlights Liberty Latin America achieved strong Q1 2025 operational momentum with over 40,000 organic broadband and postpaid mobile subscriber additions, alongside 38% operating income and 8% rebased Adjusted OIBDA growth, despite a 2% rebased revenue decline - Achieved over 40,000 organic net additions for broadband and postpaid mobile subscribers in Q1[2] - Fixed-Mobile Convergence (FMC) penetration exceeded 30% across key markets, a core strategic focus[2][3] Financial Metric | Financial Metric | Q1 2025 | YoY Change (Reported) | YoY Change (Rebased) | | :--- | :--- | :--- | :--- | | Revenue | $1,084 M | -1% | -2% | | Operating Income | $128 M | +38% | N/A | | Adjusted OIBDA | $407 M | +9% | +8% | | Adjusted FCF | $(133) M | Improvement from $(150)M | N/A | CEO Commentary and Outlook The CEO noted strong performance in C&W Caribbean, C&W Panama, and Liberty Costa Rica, but slower mobile recovery in Puerto Rico led to the withdrawal of the mid-term outlook, though 2025 growth in Adjusted OIBDA and FCF is still expected - Strong performance in C&W Caribbean and C&W Panama drove an 8% rebased Adjusted OIBDA growth YoY[3] - The recovery of the mobile business in Puerto Rico is progressing slower than anticipated, impacting overall performance[3] - Due to the uncertainty in Puerto Rico, the company is withdrawing its mid-term (2024-2026) financial outlook[3] - Despite challenges, the company still expects to achieve meaningful growth in Group Adjusted OIBDA and Adjusted FCF (before distributions) in 2025[3] Financial Performance Analysis This section analyzes Liberty Latin America's Q1 2025 financial results, focusing on revenue trends, profitability metrics like operating income and Adjusted OIBDA, and the reported net loss Revenue Analysis Total revenue for Q1 2025 was $1,083.5 million, a 1% reported and 2% rebased decrease YoY, primarily due to an 11% rebased drop in Liberty Puerto Rico, partially offset by growth in C&W Panama and Liberty Costa Rica Revenue by Segment | Segment | Q1 2025 Revenue ($M) | YoY Reported Change | YoY Rebased Change | | :--- | :--- | :--- | :--- | | C&W Caribbean | $363.9 | 0% | 0% | | C&W Panama | $177.0 | +5% | +5% | | Liberty Networks | $110.4 | +2% | +3% | | Liberty Puerto Rico | $298.4 | -9% | -11% | | Liberty Costa Rica | $158.2 | +4% | +2% | | Total | $1,083.5 | -1% | -2% | - C&W Panama: Revenue grew 5% (reported and rebased), driven by a 16% increase in mobile residential revenue from postpaid subscriber growth and higher prepaid ARPU[17] - Liberty Puerto Rico: Revenue declined 11% (rebased), largely due to a 16% rebased drop in residential mobile revenue caused by postpaid subscriber and ARPU reduction following network migration disruption[17] - C&W Caribbean: Revenue was flat. Mobile residential revenue grew 5% (rebased) from price increases and postpaid additions, but this was offset by a 3% decline in B2B revenue[14][15][17] Profitability Analysis (Operating Income & Adjusted OIBDA) Operating income surged 38% YoY to $128 million, while consolidated Adjusted OIBDA increased 9% reported and 8% rebased to $406.6 million, with margin improving to 37.5%, driven by strong cost management across segments Adjusted OIBDA by Segment | Segment | Q1 2025 Adj. OIBDA ($M) | YoY Reported Change | YoY Rebased Change | | :--- | :--- | :--- | :--- | | C&W Caribbean | $173.3 | +15% | +16% | | C&W Panama | $64.6 | +14% | +15% | | Liberty Networks | $57.9 | -2% | -2% | | Liberty Puerto Rico | $81.5 | +18% | +16% | | Liberty Costa Rica | $58.9 | +1% | -1% | | Total | $406.6 | +9% | +8% | - Operating income increased to $128 million in Q1 2025 from $93 million in Q1 2024, primarily due to the increase in Adjusted OIBDA[21] - C&W Caribbean: Adjusted OIBDA margin improved by over 600 basis points to 48%, driven by significant cost reductions in facilities, staffing, and network expenses[20] - Liberty Puerto Rico: Adjusted OIBDA grew 16% (rebased) despite lower revenue, supported by the phasing out of integration costs, lower equipment and interconnect costs, and the termination of a TSA with AT&T[24] Net Loss The company reported a net loss attributable to shareholders of $136 million for Q1 2025, a significant increase from the $1 million net loss reported in Q1 2024 Net Loss Attributable to Shareholders | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss attributable to shareholders | $(136) M | $(1) M | Operational Performance Analysis This section details Liberty Latin America's Q1 2025 operational performance, including subscriber and RGU metrics, and ARPU trends across its various segments Subscriber and RGU Metrics In Q1 2025, LLA achieved 2,000 organic customer additions and 20,300 fixed RGUs, while mobile saw a net organic loss of 16,800 subscribers, as postpaid gains were offset by prepaid losses, with significant non-organic adjustments also noted Organic Subscriber and RGU Changes | Metric (Organic Change) | Q1 2025 | Q4 2024 | | :--- | :--- | :--- | | Customer Additions | 2,000 | (2,700) | | Fixed RGU Additions | 20,300 | 14,100 | | Internet Additions | 7,300 | 3,700 | | Mobile Additions | (16,800) | 67,200 | | Postpaid Additions | 36,400 | 24,400 | - C&W Caribbean added 14,600 postpaid subscribers but lost 35,300 prepaid subscribers organically[31] - Liberty Costa Rica showed strong mobile performance, with 30,300 organic postpaid additions[31] - Significant non-organic adjustments were made, including the removal of 125,000 Corporate Responsible Users (CRUs) in Puerto Rico and a 1.184 million prepaid subscriber adjustment in Costa Rica to align with regulatory definitions[31][32] ARPU Trends Sequentially, ARPU per customer relationship showed mixed results, with C&W Caribbean up 2% and Liberty Costa Rica down 2% (FX-Neutral), while mobile ARPU was largely stable or slightly down, except for Liberty Puerto Rico's 3% increase ARPU per Customer Relationship | ARPU per Customer Relationship | Q1 2025 | QoQ FX-Neutral Change | | :--- | :--- | :--- | | C&W Caribbean | $50.71 | +2% | | C&W Panama | $37.92 | -1% | | Liberty Puerto Rico | $72.85 | +1% | | Liberty Costa Rica | $40.96 | -2% | Mobile ARPU | Mobile ARPU | Q1 2025 | QoQ FX-Neutral Change | | :--- | :--- | :--- | | C&W Caribbean | $15.19 | 0% | | C&W Panama | $12.13 | -2% | | Liberty Puerto Rico | $36.22 | +3% | | Liberty Costa Rica | $11.39 | -2% | Capital Structure and Investments This section examines Liberty Latin America's capital structure and investment activities in Q1 2025, including capital expenditures, debt levels, and liquidity position Capital Expenditures (P&E Additions) Property and equipment (P&E) additions totaled $120.3 million in Q1 2025, down 11% YoY and representing 11.1% of revenue, reflecting a focus on lowering capital intensity, with over 75,000 homes added or upgraded Property and Equipment Additions | P&E Additions | Q1 2025 ($M) | Q1 2024 ($M) | | :--- | :--- | :--- | | Total P&E Additions | $120.3 | $134.9 | | As % of Revenue | 11.1% | 12.3% | - P&E additions were highest in C&W Caribbean ($37.5M) and lowest in C&W Panama ($14.7M)[26] - The company passed/upgraded 75,300 homes in Q1 2025, an increase from 72,600 in Q1 2024, with significant activity in Liberty Costa Rica (30,000) and C&W Panama (22,300)[26] Debt and Liquidity As of March 31, 2025, LLA had total debt and finance lease obligations of $8.25 billion, with a consolidated net leverage ratio of 4.6x, maintaining a weighted average debt tenor of 5.1 years and $768.2 million in unused borrowing capacity Debt and Liquidity Metrics | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Debt & Finance Lease Obligations | $8,249.5 M | $8,143.4 M | | Consolidated Net Leverage Ratio | 4.6x | 4.5x | | Weighted Average Debt Tenor | 5.1 years | 4.1 years | | Unused Borrowing Capacity | $768.2 M | $796.3 M | - The C&W borrowing group holds the largest portion of the debt at $5.0 billion[27][28] Borrowing Group Performance This section provides a detailed analysis of the Q1 2025 financial performance for Liberty Latin America's key borrowing groups: Cable & Wireless, Liberty Puerto Rico, and Liberty Costa Rica Cable & Wireless (C&W) Borrowing Group The C&W Borrowing Group reported strong Q1 results with revenue growing 2% rebased to $628.8 million and Adjusted OIBDA surging 12% rebased to $295.9 million, achieving a 47.1% margin and a Covenant Proportionate Net Leverage Ratio of 3.8x C&W Borrowing Group Financials | C&W Borrowing Group | Q1 2025 ($M) | Rebased YoY Change | | :--- | :--- | :--- | | Revenue | $628.8 | +2% | | Operating Income | $123.5 | +54% (Reported) | | Adjusted OIBDA | $295.9 | +12% | - The group's Covenant Proportionate Net Leverage Ratio was 3.8x as of March 31, 2025[42] Liberty Puerto Rico (LPR) Borrowing Group The LPR Borrowing Group faced an 11% rebased revenue decline to $298.4 million, but achieved a 16% rebased Adjusted OIBDA growth to $81.5 million due to cost management, resulting in a positive operating income and a high Covenant Consolidated Net Leverage Ratio of 8.0x LPR Borrowing Group Financials | LPR Borrowing Group | Q1 2025 ($M) | Rebased YoY Change | | :--- | :--- | :--- | | Revenue | $298.4 | -11% | | Operating Income (Loss) | $3.8 | N.M. | | Adjusted OIBDA | $81.5 | +16% | - The group's Covenant Consolidated Net Leverage Ratio was 8.0x as of March 31, 2025[45] Liberty Costa Rica Borrowing Group The Liberty Costa Rica Borrowing Group reported a 2% increase in revenue to CRC 79.8 billion. However, operating income declined 10% and Adjusted OIBDA fell 1% to CRC 29.7 billion, while maintaining a low Covenant Consolidated Net Leverage Ratio of 1.9x LCR Borrowing Group Financials | LCR Borrowing Group (CRC Billions) | Q1 2025 | YoY Change | | :--- | :--- | :--- | | Revenue | 79.8 | +2% | | Operating Income | 15.7 | -10% | | Adjusted OIBDA | 29.7 | -1% | - The group's Covenant Consolidated Net Leverage Ratio was 1.9x as of March 31, 2025[46] Supplementary Information This section provides additional data, including consolidated subscriber metrics and detailed reconciliations of non-GAAP financial measures to U.S. GAAP equivalents, along with definitions of key operational and financial terms Consolidated Subscriber Data As of March 31, 2025, Liberty Latin America reported 1.94 million fixed-line customer relationships and 6.73 million mobile subscribers, with a network passing 4.77 million homes, highlighting the C&W segment as the largest contributor Consolidated Subscriber Metrics | Metric | Total as of March 31, 2025 | | :--- | :--- | | Homes Passed | 4,770,500 | | Fixed-line Customer Relationships | 1,938,500 | | Total RGUs | 4,007,900 | | Total Mobile Subscribers | 6,728,500 | | - Prepaid | 4,355,900 | | - Postpaid | 2,372,600 | Non-GAAP Reconciliations and Definitions The report includes a detailed glossary defining key operational and financial terms such as RGU, ARPU, Adjusted OIBDA, and various leverage ratios, along with comprehensive reconciliations of non-GAAP measures to their nearest U.S. GAAP equivalents - Provides definitions for key metrics including Adjusted OIBDA, ARPU, Customer Relationships, RGU, and Leverage[48][50][53][63] - Includes detailed reconciliation tables for operating income to Adjusted OIBDA, net cash from operating activities to Adjusted FCF, and reported figures to rebased figures for revenue and Adjusted OIBDA[72][75][82][84] - Presents reconciliations for consolidated leverage ratios and for the specific financial results of the C&W, Liberty Puerto Rico, and Liberty Costa Rica borrowing groups[89][92]