Liberty .(LBTYK) - 2025 Q4 - Annual Report

Financial Performance - The company reported a consolidated Adjusted EBITDA of $1,275.0 million for the year ended December 31, 2025, compared to $1,159.8 million in 2024, reflecting a year-over-year increase of 10%[310]. - The company reported a loss from continuing operations of $7,096.7 million for 2025, compared to a profit of $1,869.1 million in 2024[310]. - Total consolidated revenue increased by $536.6 million, or 12.4%, from $4,341.9 million in 2024 to $4,878.5 million in 2025[313]. - Adjusted EBITDA for total consolidated reportable segments increased by $13.6 million, or 0.9%, reaching $1,484.1 million in 2025[319]. - Telenet's revenue rose by $123.5 million, or 4.0%, driven by a $15.8 million increase in ARPU despite a decrease in the average number of customers[314]. - VM Ireland's total revenue increased by $3.4 million, or 0.7%, with a notable organic decrease of $17.6 million, primarily due to a decline in residential fixed subscription revenue[315]. - Other revenue surged by $410.2 million, or 36.1%, from $1,136.3 million in 2024 to $1,546.5 million in 2025, indicating successful diversification strategies[323]. - The share of results from affiliates showed a net loss of $3,186.9 million in 2025, compared to a loss of $205.6 million in 2024, largely driven by the VMO2 JV's performance[360]. Customer and Market Metrics - The company served 11,399,700 fixed-line customers and 44,886,600 mobile subscribers as of December 31, 2025, with networks passing 29,117,600 homes[290]. - Liberty Telecom serves residential and business customers in Belgium, Ireland, and Slovakia, with a total of 5,260,500 homes passed and 2,314,500 fixed-line customer relationships[29]. - As of December 31, 2025, Liberty Telecom had 2,088,500 broadband subscribers and 4,711,100 total RGUs across its consolidated operations[37]. - The VMO2 joint venture reported 16,226,100 homes passed and 5,789,300 fixed-line customer relationships, with 36,309,300 mobile subscribers[37]. Revenue Streams and Growth - The company aims to achieve organic revenue and customer growth by developing bundled services and upgrading network quality, excluding foreign currency translation effects and acquisition impacts[297]. - B2B revenue increased by $56.3 million, or 6.7%, from $842.8 million in 2024 to $899.1 million in 2025, reflecting growth in both subscription and non-subscription revenue[323]. - Residential fixed revenue grew by $57.1 million, or 3.3%, driven by a $59.0 million increase in broadband internet subscription revenue[323]. - Non-subscription revenue for total residential fixed revenue increased by $6.0 million, or 27.8%, indicating a positive trend in ancillary services[323]. Costs and Expenses - Programming and other direct costs of services increased by $219.8 million or 15.2% in 2025, with $193.7 million attributed to the Formula E Acquisition[331]. - Other operating expenses (excluding share-based compensation) rose by $122.9 million or 16.5% in 2025, with a core network and IT-related cost increase of $51.5 million or 29.3%[334]. - SG&A expenses (excluding share-based compensation) increased by $78.7 million or 8.0% in 2025, with $58.1 million attributed to the Formula E Acquisition[338]. Foreign Currency and Economic Factors - The company experienced a significant foreign currency transaction gain of $3,121.1 million in 2025, compared to a loss of $1,756.5 million in 2024[310]. - The company is subject to inflationary pressures and foreign currency exchange risks, which could impact operating margins if costs cannot be passed on to subscribers[308]. - The company’s revenue is primarily derived from jurisdictions that administer VAT or similar taxes, which could adversely affect revenue growth if tax increases occur[306]. Debt and Cash Flow - The company aims to maintain a consolidated debt balance between four and six times its consolidated Adjusted EBITDA, which is a non-GAAP measure[399]. - As of December 31, 2025, the consolidated debt and finance lease obligations totaled $8.6 billion, with $0.8 billion classified as current and $3.3 billion not due until 2029 or later[401]. - Net cash provided by operating activities decreased from $1,331.2 million in 2024 to $1,211.1 million in 2025, a decline of $120.1 million[405]. - Adjusted free cash flow for 2025 was negative at $(274.0) million, compared to positive $311.7 million in 2024[414]. Strategic Initiatives and Future Outlook - The company is focused on sustainability, with commitments to achieve Net Zero targets for 2040 across most of its operations, including Telenet and VodafoneZiggo JV[34]. - The company plans to roll out DOCSIS 4 technology capable of 10 Gbps by 2026, enhancing its broadband service offerings[44]. - Telenet's fiber network expansion plans include covering 70% of its footprint with FTTH by 2030 and 78% by 2038[64]. - The company anticipates an increase in property and equipment additions for 2026 compared to 2025, although actual amounts may vary due to several factors[409]. Joint Ventures and Affiliates - The VMO2 JV reported revenue of $13,335.2 million in 2025, a decrease from $13,649.7 million in 2024, with adjusted EBITDA increasing to $4,662.8 million from $4,503.4 million[361]. - The VodafoneZiggo JV generated revenue of $4,518.5 million in 2025, slightly up from $4,450.5 million in 2024, with adjusted EBITDA decreasing to $1,977.7 million from $2,033.9 million[363].