Liberty Capital Corporation

Liberty Capital/GCI reported second-quarter revenue of $261 million, flat year over year, and adjusted OIBDA of $96 million, down 11% year over year. Consumer revenue declined 2%, consumer gross margin was 71.8%, business revenue increased 1%, and business gross margin was 75.5%. Capital expenditures net of grant proceeds totaled $70 million in the quarter, and trailing 12-month free cash flow was $59 million. On the balance sheet, Liberty Capital had $510 million of consolidated cash equivalents and restricted cash, total principal debt of about $1.2 billion, consolidated net leverage of 2.1x, and GCI net leverage of 2.8x. For 2026, management expects CapEx of approximately $290 million, including $20 million carried over from 2025, and said 2026 should be the peak year of spending.

Ronald A. Duncan struck an upbeat tone, framing this as a transition year into a more cash-generative phase for GCI and Liberty Capital. He emphasized the new capital allocation framework: a quarterly dividend starting in December, long-term operating leverage around 3x, and residual cash to be used for investment opportunities or buybacks. He also highlighted network progress in Alaska, saying GCI has expanded 5G to more than 125 communities and that more than 100 communities were upgraded this year alone.

Brian J. Wendling focused on liquidity, leverage, and the cost structure behind the quarter’s results. He said Liberty Capital ended Q2 with $510 million of consolidated cash and restricted cash, $1.2 billion of total principal debt, and 2.1x consolidated net leverage, while GCI had $447 million of undrawn capacity under its credit facility and 2.8x net leverage. He also noted about $3 million of public company costs that were not present last year, explained that consumer gross margin rose to 71.8% because video programming costs fell, and said business gross margin declined to 75.5% mainly due to a $9 million increase in distribution costs.

Analysts focused on subscriber growth, promotional pricing, and elevated expenses. Management said the main wireless promotion is free wireless for a year when customers add or upgrade wired service, and that most of the new wireless lines will begin generating revenue about 12 months after activation. On the broadband acquisition, management said it was a small fixed wireless provider serving fringe areas outside the existing footprint, purchased to extend service and gain experience in fixed wireless; on expenses, they pointed to restored service costs related to a Quintillion fiber break last year, some one-time contractor costs, and the ongoing $3 million of public company expenses.