Transcript: Liberty Latin America Q2 2026 Earnings Conference Call

Liberty Latin America (NASDAQ: LILAK ) held its second-quarter earnings conference call on Thursday. Below is the complete transcript from the call. This content is powered APIs. For comprehensive financial data and transcripts, visit Access the full call at Summary Liberty Latin America added 45,000 mobile, postpaid, and broadband subscribers in Q2 2026, with a significant increase in Jamaica's adjusted OIBDA and free cash flow.

The company announced an AI-driven cost-optimizing IT services deal with Amdocs, expected to save over $250 million in NPV, and completed a $500 million preferred stock distribution. Liberty Caribbean launched 5G in Jamaica and introduced the Unbeatable Network initiative, while Cable & Wireless Panama saw strong subscriber growth and price increases. Liberty Networks recorded double-digit revenue growth, driven by projects in El Salvador and new ventures in Venezuela. Liberty Puerto Rico continued to improve its postpaid subscriber base and operational performance, focusing on self-funding and strategic debt management.

The company remains focused on shareholder returns through stock buybacks and strategic capital allocation, despite challenges like Hurricane Melissa. 1 billion and adjusted OIBDA of $436 million, with a focus on cost reduction, innovation, and asset optimization. Full Transcript OPERATOR Good morning, ladies and gentlemen, and thank you for standing by. Today's call is being recorded.

I'll now turn the call over to Britta Rinehart, Chief Commercial Officer, B2C Liberty Caribbean. Britta Rinehart, Chief Commercial Officer, B2C Liberty Caribbean Good morning and welcome to Liberty Latin America's second quarter 2026 investor call. At this time all participants are in listen-only mode. Today's formal presentation materials can be found under the Investor Relations section of Liberty Latin America's website at Following today's formal presentation, instructions will be given for a question and answer session.

As a reminder, this call is being recorded today. Remarks may include forward-looking statements, including the company's expectations with respect to its outlook and future growth prospects and other information and statements that are not historical fact. Actual results may differ materially from those expressed or implied by these statements. For more information, please refer to the risk factors discussed in Liberty Latin America's most recently filed annual report on Form 10-K and quarterly report on Form 10-Q.

Along with the associated press release, Liberty Latin America disclaims any obligation to update any forward-looking statements or information to reflect any change in its expectations or in the conditions on which any such statement or information is based. In addition, on this call we will refer to certain non-GAAP financial measures, which are reconciled to the most comparable GAAP financial measures, which can be found in the appendices to this presentation, which is accessible under the Investors section of our website. I would now like to turn the call over to our CEO, Mr. Balan Nair.

Balan Nair, Chief Executive Officer Thank you, Britta, and welcome everyone to Liberty Latin America's second quarter 2026 results presentation. I will be running through our group highlights and an overview of our operating results before Chris Noyce, CFO, reviews the company's financial performance. We'll then get straight to your questions. As always, I'm joined by my executive team from across our operations and I'll invite them to contribute as needed during the Q&A following our prepared remarks.

As a point of housekeeping, we'll both be working from slides which you can find on our website at starting on slide 4, and our highlights: the second quarter showed continued solid operational trends across large parts of the business. We added 45,000 mobile, postpaid and broadband subscribers in the second quarter, with all segments reporting positive contributions. Strong postpaid mobile trends have become a feature of our results and this quarter we were also pleased to see improvements in broadband subscriber adds, with momentum that extended across markets beyond the recovery.

In Jamaica, we reported 3% year-over-year rebased Adjusted OIBDA growth in the second quarter. This represents an acceleration on Q1 trends and sets us up for a strong second half. We also reported another improvement in adjusted free cash flow before distributions to partners, which for the first half of 2026 was materially higher than in the same period last year. We already have cost efforts in flight, and we are excited.

Additionally, we announced yesterday an AI-driven, cost-optimizing IT services deal with Amdocs. This agreement will help sustain continued investment in AI capabilities, innovation and digital transformation, and it will help drive further material OPEX and CAPEX reductions going forward as we strive to continue expanding both Adjusted OIBDA margins and Adjusted OIBDA less P&E additions margins over the coming years. We estimate the NPV value of this deal to be worth north of $250 million. Following our announced intention at the time of our Q1 earnings, we successfully completed the distribution of $500 million in preferred stock.

This represents an attractive cash return for shareholders who have held on to the paper. In addition, it represents us leaning into the levered equity model as we have added gearing to the common equity. This distribution should therefore be read as an indication of our growing confidence in the prospects of our business over the coming years. Turning to share repurchases, we have continued purchasing our common equity through Q2 and more actively in July.

We continue to see a discount to fair value on our common stock; in part, we feel this persists given perceived headwinds from Puerto Rico, despite a clear commitment to fund Liberty Puerto Rico through local assets as exemplified by our recent financing activities. However, we remain focused on value opportunities and appropriate capital allocation more broadly across the group, noting our recent sale agreement in Peru. Turning now to our operations. On slide 5, we review our Liberty Caribbean segment.

While we continue to see negative headwinds from Hurricane Melissa in Jamaica, the effect is clearly diminishing. On the top left of the slide we show how Liberty Caribbean's postpaid subscriber base continued to expand, adding 11,000 postpaid subscribers, of which 6,000 were delivered in Jamaica in the second quarter and with a healthy contribution from our South Caribbean markets. In June we were the first operator to launch 5G in Jamaica. The service covers approximately 60—70% of the population and is available to our postpaid subscribers both on the residential and enterprise side and should help maintain postpaid momentum.

Our market-leading FMC offers continue to drive postpaid growth as we increase the penetration of our existing fixed subscriber base. We are also excited about our latest initiative in the Caribbean, Unbeatable Network, which is focused on the quality assurance of our fixed network as well as mobile connectivity enhancements, helping to further drive FMC adoption. The Unbeatable campaign is now live in Jamaica and Cayman and coming soon to other Liberty Caribbean markets, as well as being deployed across the broader LLA Group in the Caribbean. It encompasses the unique concept of an always-on network, both in fixed and mobile.

On the one hand, fixed broadband is backed up by an automatic and seamless transition from home WiFi to the mobile network to manage power outages, further supported by WiFi 6 and Plume Smart WiFi for improved in-home connectivity. On the other hand, mobile connectivity is backed up by satellite through our Starlink DTC partnership. On the bottom left of the slide we show how the Internet net adds performance has been quite consistent. It is worth noting that the net adds figures exclude offline subscribers reconnected in the period in Jamaica.

As a reminder, these were offline customers we retained in our subscriber count through the outage period who are now back on the network and once again revenue-generating. In Jamaica specifically, we continue to recover revenue to its pre-hurricane levels. This reflects a combination of recovery in residential, fixed and B2B as well as a stronger performance in mobile overall. Liberty Caribbean is anchored by great products, upgraded networks, stable markets and Jamaica recovery.

Both our consumer and B2B segments are in good health. On slide 6 we review Cable & Wireless Panama, which as a segment provided the highest subscriber additions in the group in Q2 across postpaid and broadband. On mobile, we continue to see postpaid as a strong driver, reporting double-digit year-over-year subscriber growth. FMC continues to increase, running at over 40%.

While we see ongoing prepaid-to-postpaid migration, we are still also growing the prepaid subscriber base in Panama. With the industry having had some pushback on prepaid price increases in Q1, recent regulatory commentary has been more supportive on the broader pricing environment, and in July we initiated price increases on postpay. Initial feedback has validated this approach so far, seeing lower customer care contact volumes and reduced churn relative to historical pricing actions. To further enhance our mobile service, in the second quarter we announced a partnership with Starlink similar to the one we previously announced in Costa Rica.

On the fixed side, we have shown a sharp increase in residential broadband subscriber adds to 10,000 in the second quarter, reflecting success. Successful commercial activities focused on quality first, driving higher gross adds as well as a significant decline in churn versus Q1. We also registered strong net adds to both video and voice in the second quarter. As with postpaid mobile, we initiated fixed price increases in July and early feedback here has also been supportive.

We look forward to the rollout of our Unbeatable campaign in Panama, underpinned by Always On WiFi in the home and strengthened with the mass Starlink launch for mobile. On B2B, we continue to see a healthy pipeline including activity around government project delivery and execution. This is our typical cycle in B2B, being second-half weighted. All in all, we are growing our operating metrics, we are innovating in products, and we are setting up for a good second half in Panama.

Turning to slide 7 and Liberty Networks, which recorded the best year-over-year revenue growth across the LLA Group in Q2. On our wholesale business we recorded an increase in revenue growth to 14% year over year, driven this quarter by a healthy contribution from our project in El Salvador. We have a strong and productive working relationship with the Government of El Salvador and have continued to deliver on the milestones required for the successful completion of this project. More broadly in wholesale, we see continued underlying demand for subsea capacity from international and regional carriers and increasingly from hyperscalers.

We are also recognizing recent changes in the geopolitical environment in Venezuela as providing opportunities to invest for further potential growth. Working alongside CANTV, we are launching Phoenix, a submarine cable system that will have an extension of 378 km and will provide 14 terabits of capacity utilizing the Americas-2 route. This is a modest investment but will enable direct access to the Caracas market, which represents about half of Venezuela's total business traffic and the country's largest concentration of enterprise and carrier demand.

While still early days for Venezuela, this positions Liberty Networks well with a third network connection point to support Venezuela's critical industries and a return to economic growth and broader prosperity for the country. Meanwhile, revenue growth in our enterprise business remains robust at low single-digit levels. The Liberty Networks business continues to be a strong cash generator with a unique set of assets that provide a meshed and resilient grouping of network systems that we are carefully expanding with new and value-accretive routes.

Turning to slide 8 and Liberty Costa Rica, which remains one of our most dynamic markets and where cost-cutting efforts are starting to flow. On the fixed side, we continue to hold firm on volumes in the competitive fixed market, registering 2,000 broadband adds in the second quarter. Fixed ARPU remains under some pressure, though sequentially fixed subscription revenue was relatively stable, with volume support coming also from net adds to video and voice in the second quarter as we continue to nudge up our bundling ratio.

On the mobile side, while we have seen somewhat more elevated competition in postpaid in recent quarters, the lighter additions performance in Q2 was additionally impacted by a planned and temporary pause as we migrated to new sales channels as part of our cost savings program. The run-rate in July is already back to historic levels. We are also eagerly awaiting the commercial launch of Liberty Starlink in the second half of the year to help further differentiate our mobile offering. Anticipating this launch, we recently applied a price increase to reflect the improved offer coming soon, which will be available to the majority of our customer base.

Finally, and as Chris will talk to, we are beginning to see our cost reduction initiatives in Costa Rica come through in the numbers, helping drive strong year-over-year Adjusted OIBDA growth. Combined with our 5G mobile network, a nationwide 1 gigabit per second broadband network, a good economy and our focus on repositioning B2B in this market, we are positive on the second half of this year. Turning to slide 9 and Liberty Puerto Rico. On the mobile side, we continue to advance our postpaid subscriber base, registering positive adds for the third consecutive quarter.

Postpaid gross adds remain robust while churn has improved quite significantly over the course of the first half. Our postpaid porting data continues to improve and, as of the end of July, show we are net gainers versus both players in the market for the first time since the migration. Volumes here are being supported by a SIM-only offer, Liberty Simple, providing for attractive economics given the absence of subsidies. On prepaid, meanwhile, we are also seeing a more stable subscriber base and, with the Boost migration behind us, we can now turn our attention to growing this base over the coming quarters.

On the residential fixed business, we continue to see better momentum through Q2. We registered a further reduction in broadband churn in Q2, having steadily improved now in each of the last three quarters. Fixed churn at Liberty Puerto Rico is one of the lowest across the LLA Group. Gross adds, meanwhile, are additionally beginning to benefit from rapid growth in the much smaller USVI business within the segment.

At the start of Q3 we went live in an above-the-line campaign on Unbeatable Network in Puerto Rico. Frequent power outages on the island suggest mobile backup to fixed broadband should resonate well and further cement fixed broadband's customer stickiness. We have also capitalized on our video superiority on the island. With the full lineup of local channels and a specific advantage here, we have delivered two consecutive quarters of positive video net adds.

This turnaround is driven by both sides of the funnel. Gross adds are up approximately 50% while churn has stabilized at healthier levels. On the back of this recovered base, we executed a $2 per month rate increase across the TV portfolio. S.

And with that, I'll pass you over to Chris Noyce, our Chief Financial Officer, who will take you through our financial performance before we move on to your questions. Chris Noyce (Chief Financial Officer) Thanks, Balan. 1 billion, up 1% reported and flat on a rebased basis, while adjusted OIBDA was $436 million in the quarter reflecting 3% rebased growth over Q2 2025. There are a number of high-level items to point out before we dig into the specific operations.

Liberty Networks was our strongest performer in the quarter, including delivery of double-digit rebased revenue growth. Liberty Caribbean's results were impacted by the aforementioned Hurricane Melissa headwinds. Residential mobile service revenue expansion continues to be a bright spot across the group as we capitalize on FMC and prepaid-to-postpaid migration strategies. Focused savings initiatives across the group on both direct costs and OPEX are contributing to our consolidated adjusted OIBDA margin of 40%, an approximate 130 basis points year-over-year improvement.

And finally, both consolidated revenue and adjusted OIBDA grew sequentially over Q1 2026 results. Slide 12 recaps our Q2 results for the C&W credit silo. Starting with Liberty Caribbean, in Q2 LC reported $362 million in revenue and $165 million in adjusted OIBDA, reflecting rebased year-over-year declines. The principal driver of decline stemmed from Hurricane Melissa, which impacted LC by roughly $6 million net across both revenue and adjusted OIBDA.

Notwithstanding this headwind, our recovery continues to progress very well and we are on tap for much improved results in Q4. A key highlight in the quarter was continued success in residential mobile as LC delivered 4% rebased revenue growth on the back of FMC and pricing actions taken in the past quarters.