Liberty(US:FWONK)2025-08-07 20:33Part I Financial Statements The company's financial position strengthened as of June 30, 2025, with total assets increasing to $13.8 billion from $12.9 billion at year-end 2024, driven by higher cash balances. Total equity rose to $7.4 billion. For the second quarter of 2025, revenue grew significantly to $1.34 billion from $0.99 billion year-over-year, primarily due to strong performance from Formula 1. This resulted in a substantial increase in operating income to $273 million for the quarter, compared to $57 million in the prior year. Net earnings from continuing operations were $204 million. Cash flow from operations for the first six months was robust at $612 million. Key events detailed in the notes include the acquisition of MotoGP post-quarter-end, the 2024 split-off of Liberty Sirius XM Holdings, and a planned split-off of the Liberty Live Group Condensed Consolidated Balance Sheets As of June 30, 2025, total assets increased to $13.82 billion from $12.95 billion at December 31, 2024, primarily due to a rise in cash and cash equivalents. Total liabilities grew to $6.46 billion from $5.90 billion, largely driven by a significant increase in the current portion of debt to $1.80 billion, while long-term debt decreased. Total equity increased from $7.05 billion to $7.36 billion over the same period Condensed Consolidated Balance Sheet Highlights (in millions) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $13,821 | $12,948 | | Cash and cash equivalents | $3,448 | $2,956 | | Total current assets | $4,102 | $3,347 | | Goodwill | $4,135 | $4,134 | | Total Liabilities | $6,458 | $5,897 | | Current portion of debt | $1,803 | $26 | | Long-term debt | $2,996 | $4,522 | | Total Equity | $7,363 | $7,051 | Condensed Consolidated Statements of Operations For the second quarter of 2025, total revenue increased by 35.7% year-over-year to $1.34 billion, driven by a 41% rise in Formula 1 revenue. Operating income surged to $273 million from $57 million in Q2 2024. Net earnings from continuing operations attributable to Liberty stockholders were $204 million, compared to $158 million in the prior-year quarter. Diluted EPS from continuing operations for Liberty Formula One stock was $1.52, up from $0.10 Q2 and H1 2025 vs 2024 Performance (in millions, except per share data) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $1,341 | $988 | $1,788 | $1,575 | | Formula 1 Revenue | $1,203 | $853 | $1,603 | $1,403 | | Operating Income | $273 | $57 | $202 | $150 | | Net Earnings from Continuing Operations | $204 | $158 | $209 | $162 | | Net Earnings (incl. Discontinued Ops) | $204 | $507 | $209 | $752 | | Diluted EPS (Formula One Stock) | $1.52 | $0.10 | $1.55 | $0.42 | Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2025, net cash provided by operating activities was $612 million, a significant increase from $394 million in the same period of 2024. Net cash used in investing activities was $120 million, primarily due to payments for acquisitions. The company ended the period with $3.47 billion in cash, cash equivalents, and restricted cash, up from $2.96 billion at the beginning of the year Six Months Ended June 30 Cash Flow Summary (in millions) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $612 | $394 | | Net Cash from Investing Activities | $(120) | $(200) | | Net Cash from Financing Activities | $8 | $6 | | Net Increase/(Decrease) in Cash | $509 | $81 | | Cash at End of Period | $3,472 | $2,109 | Notes to Condensed Consolidated Financial Statements The notes detail significant corporate activities and accounting policies. Key events include the acquisition of an 84% stake in MotoGP on July 3, 2025, for approximately $3.7 billion. The September 2024 split-off of Liberty Sirius XM Holdings is now treated as a discontinued operation. The company continues to use a tracking stock structure for its Formula One and Liberty Live groups and announced a plan to split off the Liberty Live Group in the second half of 2025. Debt classifications were impacted by exchangeable debentures becoming currently redeemable. Formula 1 signed the 2026 Concorde Commercial Agreement with its teams, involving a $50 million incentive payment - On July 3, 2025, the Company acquired approximately 84% of Dorna Sports, S.L. ("MotoGP") for a preliminary purchase price of about $3.7 billion, funded by cash and $1.0 billion in new debt. The initial accounting for the acquisition is not yet complete38 - The split-off of Liberty Sirius XM Holdings was completed on September 9, 2024, and its financial results are now presented as discontinued operations3447 - The company announced a plan to split off the Liberty Live Group in the second half of 2025, which will result in the Liberty Formula One common stock no longer being a tracking stock61 - The 2.375% Exchangeable Senior Debentures due 2053, with a principal of $1.15 billion, were reclassified to current liabilities because holders gained the right to exchange them starting July 1, 2025107109 - In March 2025, Formula 1 paid a $50 million incentive to its 10 teams for signing the 2026 Concorde Commercial Agreement, which governs their participation from 2026 to 2030117 Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management attributes the strong Q2 2025 performance to Formula 1, which saw revenue increase to $1.23 billion from $0.87 billion year-over-year, driven by having one additional race, a different mix of events, and contractual fee increases. This led to a significant rise in consolidated Adjusted OIBDA to $364 million for the quarter. The company highlights the recent acquisition of MotoGP and the planned split-off of the Liberty Live Group as key strategic moves. As of June 30, 2025, the company held $3.45 billion in cash, with the Formula One Group holding $3.14 billion. Management believes current liquidity is sufficient for projected uses, including debt service and investments - The company acquired an 84% interest in MotoGP on July 3, 2025, for approximately $3.7 billion. MotoGP will be attributed to the Formula One Group152 - A plan is underway to split off the Liberty Live Group in the second half of 2025, which will make Liberty Media and Liberty Live separate public companies153 Consolidated Adjusted OIBDA Reconciliation (in millions) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Operating income (loss) | $273 | $57 | $202 | $150 | | D&A | $80 | $89 | $157 | $175 | | Stock-based compensation | $8 | $7 | $10 | $20 | | Acquisition costs | $3 | $11 | $14 | $20 | | Concorde incentive payments | — | — | $50 | — | | Adjusted OIBDA | $364 | $164 | $433 | $365 | Formula 1 Operating Results (in millions) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Formula 1 revenue | $1,226 | $871 | $1,629 | $1,424 | | Adjusted OIBDA | $361 | $160 | $446 | $368 | | Operating income (loss) | $293 | $84 | $265 | $220 | | Number of Events | 9 | 8 | 11 | 11 | - As of June 30, 2025, the company had $3.45 billion in cash and cash equivalents, with $3.14 billion attributed to the Formula One Group and $308 million to the Liberty Live Group172 Quantitative and Qualitative Disclosures about Market Risk The company is exposed to market risks from changes in stock prices, interest rates, and foreign currency exchange rates. A significant portion of its debt is at fixed rates, mitigating some interest rate volatility. The company holds a significant investment in the publicly traded stock of Live Nation, which is subject to market price fluctuations; a hypothetical 10% decline in Live Nation's stock price as of June 30, 2025, would have reduced its value by $1.05 billion. The company also has exposure to foreign currency risk, as its international operations, particularly Formula 1, generate revenues and incur costs in various currencies - The company is exposed to stock price risk through its holdings in publicly traded securities. Its investment in Live Nation is not carried at fair value on the balance sheet, but a 10% price drop at June 30, 2025 would represent a $1,054 million decline in value200 - The company manages interest rate risk through a mix of fixed and variable rate debt. As of June 30, 2025, the company had approximately $3.9 billion in fixed-rate debt and $172 million in variable-rate debt198199 Controls and Procedures Based on an evaluation as of June 30, 2025, the company's management, including the CEO and principal financial officer, concluded that its disclosure controls and procedures are effective. There were no material changes to the company's internal control over financial reporting during the second quarter of 2025 - Management concluded that the Company's disclosure controls and procedures were effective as of June 30, 2025201 - No material changes occurred in the Company's internal control over financial reporting during the quarter ended June 30, 2025202 Part II — Other Information Legal Proceedings There have been no material changes to the legal proceedings previously described in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to legal proceedings have occurred since the 2024 Form 10-K filing204 Risk Factors The company updated its risk factors to incorporate those associated with its recent acquisition of MotoGP, aligning them with existing risks for Formula 1. Key risks for the Formula One Group now include potential declines in the popularity of either F1 or MotoGP, termination of critical long-term agreements with governing bodies (FIA for F1, FIM for MotoGP), and the potential for teams to withdraw or form rival series. The company also disclosed that in August 2024, the Department of Justice opened an antitrust investigation into Formula 1's conduct concerning the application by Andretti Formula Racing to enter the F1 Championship. Other significant risks involve competition law enforcement, renewal of major commercial contracts, counterparty credit risk, changes in tax laws (such as the OECD's 'Two Pillar' approach), and challenges in expanding to new markets - Risk factors have been updated to include risks related to the newly acquired MotoGP business, mirroring many of the existing risks for Formula 1206 - In August 2024, the Department of Justice, Antitrust Division, opened an investigation into Formula 1's conduct regarding the application of Andretti Formula Racing to enter the F1 Championship222 - A key risk is the potential termination of foundational agreements: the 100-Year Agreements with the FIA for Formula 1 and the FIM Agreement for MotoGP, which grant exclusive commercial rights210211 - The company faces risks from potential changes in international tax laws, specifically the OECD's "Two Pillar" approach, which could lead to higher effective tax rates230234 - There is a risk of event cancellations due to factors beyond control, such as natural disasters, geopolitical conflicts, or promoter failures, which could lead to significant revenue loss not fully covered by insurance241242 Unregistered Sales of Equity Securities and Use of Proceeds During the three months ended June 30, 2025, the company did not repurchase any shares of its Liberty Formula One or Liberty Live common stock. As of June 30, 2025, approximately $1.1 billion remained available for future repurchases under the company's authorized share buyback program - No shares of Liberty Formula One or Liberty Live common stock were repurchased in the three months ended June 30, 2025261 - As of June 30, 2025, approximately $1.1 billion was available for future share repurchases under the existing program261 Other Information During the fiscal quarter ended June 30, 2025, none of the company's directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No director or officer adopted or terminated a Rule 10b5-1 trading plan during the second quarter of 2025263 Exhibits This section lists the exhibits filed with the Quarterly Report, including various agreements, certifications, and interactive data files as required by Regulation S-K