Liberty Global Lilac Eyes Recovery After Storm Hit

Liberty Global Plc Lilac Class A ((LILA)) has held its Q4 earnings call. Read on for the main highlights of the call.

Liberty Global Plc Lilac Class A’s latest earnings call struck an overall upbeat tone despite clear storm clouds. Management highlighted strong gains in profitability, free cash flow and mobile growth, underpinned by tighter cost discipline and better capital efficiency. Yet they were candid about hurricane damage, pressure in Puerto Rico and intense fixed‑line competition that will weigh on near‑term results.

Robust Adjusted OIBDA Growth Signals Operational Momentum

Liberty Global Lilac reported adjusted OIBDA of $1.7 billion for 2025, delivering 9% rebased growth and signaling healthier operations across the region. Fourth‑quarter adjusted OIBDA reached $451 million, up 8% on a rebased basis, showing that margin‑driven profit expansion is holding even as revenue remains broadly flat.

Cash Efficiency Improves as P&E Burden Eases

Adjusted OIBDA less P&E additions jumped 27% year‑over‑year to $1.1 billion, equivalent to 24% of revenue, highlighting improved cash conversion. In Q4 this metric rose 30% to $231 million, helped by lower capital intensity and sharper project selection as P&E additions fell to 14% of revenue for the full year.

Free Cash Flow Strength Boosted by Weather Hedges

Adjusted free cash flow before partner distributions climbed 29% to $150 million in 2025, reflecting both stronger earnings and tighter capex. In Q4 adjusted FCF reached $278 million, temporarily lifted by $81 million of net proceeds from weather derivatives that offset part of the hurricane‑related impact.

Mobile Postpaid Growth Led by Costa Rica and Puerto Rico Turnaround

The group added more than 225,000 postpaid mobile subscribers in 2025, underscoring the resilience of its wireless franchises. Costa Rica was the standout with over 160,000 postpaid additions, a 16% expansion on its 2024 base, while Puerto Rico finally returned to positive net postpaid adds in Q4 after its migration disruption.

Liberty Networks Secures Strategic Infrastructure Wins

Liberty Networks posted 6% rebased wholesale revenue growth, or 12% excluding noncash IRUs, underscoring solid demand for regional connectivity. Q4 revenue rose 14% to $129 million and adjusted OIBDA climbed 21% to $75 million, supported by wins such as the El Salvador submarine cable build and continued progress on the 5,600 km MANTA system.

C&W Panama and B2B Businesses Show Encouraging Traction

C&W Panama delivered 3% rebased revenue growth for 2025, with residential mobile revenue up a healthy 7% as consumer demand held firm. B2B trends improved as the year progressed, producing full‑year rebased B2B growth of 1% and a standout Q4 with 24% year‑over‑year growth boosted by a national education contract.

Cost Discipline Drives Margin Expansion and Lower Capex

The company expanded adjusted OIBDA margins by roughly 300 basis points in 2025 as cost actions and integration benefits flowed through. P&E additions were trimmed to $640 million, or 14% of revenue versus 16% in 2024, freeing up more cash even while funding strategic builds and network upgrades.

Jamaica Mobile Network Bounces Back After Hurricane Melissa

Despite severe storm damage, Jamaica’s mobile network rebounded quickly and is now handling higher subscriber levels and data usage than before Hurricane Melissa. The network’s resilience was validated externally as Ookla named it the fastest mobile network on the island for the second half of 2025.

5G Expansion and AWS Deal Support Long‑Term Digital Strategy

The group expanded 5G availability across Puerto Rico, Panama, Costa Rica, Cayman Islands and Barbados, with Costa Rica already surpassing 300,000 5G customers. Management also unveiled a partnership with AWS to bring local compute and AI capabilities, including hosting AWS infrastructure in regional data centers to deepen enterprise offerings.

Liquidity Strengthens as Consolidated Leverage Edges Down

Liberty Global Lilac closed the year with $800 million of cash and $900 million of undrawn credit lines, giving it $1.7 billion in available liquidity. Consolidated net leverage improved to 4.3 times and would sit in the mid‑3s excluding Puerto Rico, supporting management’s emphasis on balance sheet flexibility.

Hurricane Melissa Delivers Material Near‑Term Earnings Hit

Hurricane Melissa weighed heavily on performance, with an estimated $27 million adverse impact to adjusted OIBDA already recorded. Jamaica’s fixed network suffered substantial damage, removing 133,000 homes passed from the footprint and causing extended broadband outages, and management now expects about a $100 million hit to 2026 adjusted free cash flow.

Revenue Trends Flat as Strength Offsets Storm and Puerto Rico Drag

Full‑year revenue came in at $4.4 billion, slightly down on a rebased basis as growth pockets were offset by storm damage and structural pressures. Q4 revenue of $1.2 billion showed just 1% rebased growth, with strong wholesale and C&W Panama performance largely counterbalanced by declines in Jamaica and Puerto Rico.

Puerto Rico Faces Top‑Line Weakness and Heavy Leverage

Puerto Rico remained a key trouble spot with a 6% revenue decline for 2025, including a 6% drop in residential mobile, 16% fall in B2B and 1% dip in residential fixed services. The unit also carries $2.9 billion of debt and leverage near 8 times, prompting management to pursue a liability management process and consider additional liquidity options.

Fixed Broadband and Legacy Video Weigh on Several Markets

Fixed residential revenue remained under pressure, particularly in Costa Rica where rebased fixed revenue fell about 4% amid aggressive price competition. Liberty Caribbean’s fixed businesses also saw customer losses in Q4, especially in Jamaica, while legacy video and voice services continued to drag on overall fixed‑line revenue.

Strategic Network Builds Create Near‑Term FCF Drag

Large infrastructure projects such as the MANTA submarine cable are front‑loaded in terms of capital spending, depressing near‑term free cash flow. Management argued these builds are critical to securing future wholesale revenue and margin upside even though they temporarily tighten cash generation and investor patience.

Puerto Rico B2B Weakness and Migration Aftereffects Persist

B2B performance in Puerto Rico remained soft, with revenue down 16% year‑over‑year as the business works through the lingering impacts of system migrations. Executives cautioned that fully restoring momentum in this segment will take multiple quarters, implying that Puerto Rico will remain an earnings overhang for some time.

Competitive Pricing Squeezes Fixed‑Line ARPU

Intense price competition in several fixed markets, notably Costa Rica, has eroded revenue growth even as broadband subscriber numbers continue to rise. This environment is constraining fixed‑line ARPU and forcing Liberty Global Lilac to lean even more heavily on cost cuts, convergence offers and higher‑value services to protect profitability.

Guidance Points to Back‑Half 2026 Recovery and 2027 Normalization

Management guided to a recovery that is weighted toward the second half of 2026, aiming to be close to pre‑hurricane profitability run‑rates by year‑end despite about a $100 million free cash flow hit from Hurricane Melissa. They plan to deploy the $81 million of parametric proceeds into the Jamaica rebuild, keep capex and costs tightly controlled and maintain a focus on shareholder returns while working from a base of higher 2025 OIBDA, stronger cash metrics and improved leverage.

Liberty Global Lilac’s earnings call blended solid operational progress with a realistic assessment of storm and market headwinds. Profitability and cash generation are moving in the right direction, but storm‑related damage, Puerto Rico leverage and fixed‑line pricing pressure will test execution. For investors, the story now hinges on delivering the promised 2026 recovery and full normalization by 2027.