LILAP — Liberty Latin America Ltd. 9% Cum Perp Red Pfd Shs Series A When-issued

Liberty Latin America (LILAP) Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics

• Revenue: $1.1 billion, reflecting a 1% rebased decline year-over-year.
• Adjusted OIBDA: $405 million, also a 1% rebased decline, attributed to Hurricane Melissa's impact and project phasing in B2B.
• Adjusted Free Cash Flow (FCF): Negative $64 million, but $40 million better year-over-year, driven by stronger cash flow from operations and reduced capital expenditures.
• Debt: Total debt of $8.4 billion with a consolidated net leverage of 4.5x.
• Liquidity: $1.5 billion, including $700 million in cash and $800 million in available credit lines.

2. Strategic Updates and Business Highlights

• Subscriber Growth: Added 50,000 mobile postpaid subscribers, with significant contributions from Jamaica and Liberty Caribbean.
• Capital Structure: Announced intention to distribute $500 million in preferred equity with a 9% dividend, aimed at returning cash to shareholders and enhancing equity structure.
• Share Repurchase: Actively repurchased shares for the first time since H1 2024, with $185 million remaining under the buyback authorization.
• Jamaica Recovery: Faster-than-expected recovery post-Hurricane Melissa, with positive trends in mobile and fixed broadband subscriber additions.
• Liberty Networks: Continued demand for sub-sea capacity, with a 9% year-over-year revenue growth in this segment.

3. Forward Guidance and Outlook

• Optimism for Jamaica: Management expects to return to pre-hurricane adjusted OIBDA levels by year-end and is confident about free cash flow recovery.
• Cost Management: Ongoing focus on cost reduction initiatives, including leveraging AI for operational efficiencies.
• Future Growth: Anticipation of improved revenue growth in the latter half of 2026, supported by strategic initiatives and market recovery.

4. Challenges and Points of Concern

• Hurricane Impact: Full quarter impact from Hurricane Melissa resulted in a $12 million revenue loss for Liberty Caribbean.
• Competitive Pressures: Notable competition in Costa Rica affecting fixed ARPU and residential fixed revenue.
• Regulatory Pushback: Price increases faced challenges in Panama's prepaid market, impacting revenue growth.
• B2B Project Phasing: Timing of revenues and costs in B2B segments led to fluctuations in financial performance.

5. Notable Q&A Insights

• Pricing Strategy: CEO Balan Nair emphasized disciplined front book pricing and the importance of maintaining market share, particularly in competitive markets like Costa Rica.
• Energy Costs: Management acknowledged rising energy costs but indicated they represent only about 2% of revenue, with strategies in place to mitigate impacts.
• AI Implementation: Commitment to leveraging AI for cost improvements and operational efficiencies was highlighted as a key focus moving forward.

Overall, Liberty Latin America demonstrated resilience in Q1 2026 despite facing challenges from external factors like Hurricane Melissa and competitive pressures. The company is optimistic about recovery and growth, particularly in Jamaica, while strategically managing costs and enhancing shareholder returns.