Liberty Broadband Corporation (LBRDK) Bundle
Understanding Liberty Broadband Corporation (LBRDK) Revenue Streams
Understanding Liberty Broadband Corporation’s Revenue Streams
The revenue breakdown of Liberty Broadband Corporation is essential for understanding its financial health. The company's primary revenue sources include data services, wireless services, and other revenue streams. Below is the detailed analysis of these revenue segments.
Revenue Sources Breakdown
| Revenue Source | Q3 2024 (in millions) | Q3 2023 (in millions) | 9M 2024 (in millions) | 9M 2023 (in millions) |
|---|---|---|---|---|
| Consumer Data | 125 | 105 | 342 | 317 |
| Consumer Wireless | 12 | 12 | 36 | 38 |
| Consumer Other | 9 | 9 | 25 | 27 |
| Business Data | 125 | 105 | 342 | 317 |
| Business Wireless | 12 | 12 | 36 | 38 |
| Business Other | 9 | 9 | 25 | 27 |
| Total Revenue | 262 | 240 | 753 | 731 |
Year-over-Year Revenue Growth Rate
The year-over-year revenue growth rate has shown a positive trend with a 9.17% increase in Q3 2024 compared to Q3 2023, moving from $240 million to $262 million. For the nine-month period, revenue increased from $731 million in 2023 to $753 million in 2024, reflecting a growth rate of approximately 3.01%.
Contribution of Different Business Segments
In terms of contribution, the consumer data segment has been the most significant driver of revenue growth, with an increase of $20 million in Q3 2024 compared to the previous year. Business data revenue also showed strong performance, increasing by $20 million for the same period. Conversely, consumer wireless and consumer other segments remained flat, with slight declines in business wireless and business other revenue sources.
Significant Changes in Revenue Streams
Notable changes in revenue streams include:
- Consumer data revenue increased by $20 million for Q3 2024.
- Business data revenue rose by $20 million for the same period.
- Overall, the consumer wireless revenue remained stable, while there was a slight decrease in business wireless revenue.
These shifts indicate a strategic focus on enhancing data service offerings, which has proven beneficial for revenue growth.
A Deep Dive into Liberty Broadband Corporation (LBRDK) Profitability
A Deep Dive into Liberty Broadband Corporation's Profitability
Gross Profit Margin: For the nine months ended September 30, 2024, the gross profit margin was approximately $3,195 million, derived from total revenue of $41,159 million. This indicates a gross profit margin of 7.76%. In comparison, for the same period in 2023, the gross profit was $3,191 million on revenue of $40,896 million, yielding a margin of 7.80%.
Operating Profit Margin: The operating income for the nine months ended September 30, 2024, was $9,729 million, leading to an operating profit margin of 23.6%. For the corresponding nine months in 2023, the operating income was $9,292 million, reflecting a margin of 22.7%.
Net Profit Margin: The net income attributable to shareholders for the nine months ended September 30, 2024, was $3,617 million, resulting in a net profit margin of 8.8%. In 2023, the net income was $3,499 million, yielding a margin of 8.6%.
Trends in Profitability Over Time
In the nine months ended September 30, 2024, net earnings increased to $578 million from $483 million in 2023, indicating a year-over-year growth of approximately 19.7%. The net profit margin also improved from 8.6% in 2023 to 8.8% in 2024.
Comparison of Profitability Ratios with Industry Averages
Industry averages for similar companies exhibit a gross profit margin of 8%, an operating profit margin of 20%, and a net profit margin of 7%. Liberty Broadband's margins are above industry averages, showcasing its strong position in profitability metrics.
Analysis of Operational Efficiency
The Adjusted OIBDA for the nine months ended September 30, 2024, was $17,005 million, compared to $16,594 million for the same period in 2023, reflecting an increase of 2.5%. This growth indicates effective cost management and improved operational efficiency.
| Metric | 2024 (9 Months) | 2023 (9 Months) | Change (%) |
|---|---|---|---|
| Gross Profit Margin | 7.76% | 7.80% | -0.51% |
| Operating Profit Margin | 23.6% | 22.7% | 3.96% |
| Net Profit Margin | 8.8% | 8.6% | 2.33% |
| Adjusted OIBDA | $17,005 million | $16,594 million | 2.5% |
Debt vs. Equity: How Liberty Broadband Corporation (LBRDK) Finances Its Growth
Debt vs. Equity: How Liberty Broadband Corporation Finances Its Growth
As of September 30, 2024, Liberty Broadband Corporation had a total debt of $3,642 million. This total consists of various debt instruments, including:
| Debt Type | Outstanding Principal ($ millions) | Carrying Value ($ millions) |
|---|---|---|
| Margin Loan Facility | 790 | 790 |
| 3.125% Exchangeable Senior Debentures due 2053 | 965 | 954 |
| 3.125% Exchangeable Senior Debentures due 2054 | 860 | 922 |
| Senior Notes | 600 | 620 |
| Senior Credit Facility | 423 | 423 |
| Wells Fargo Note Payable | 4 | 4 |
| Deferred Financing Costs | - | (1) |
| Total Debt | 3,642 | 3,712 |
The company’s debt-to-equity ratio stands at approximately 0.38, calculated from total liabilities of $3,642 million against total equity of $9,538 million as of September 30, 2024. This ratio is below the industry average of around 0.5, indicating a relatively conservative approach to leveraging.
In 2024, the company engaged in significant refinancing activities, including:
- Issuance of $860 million in 3.125% Exchangeable Senior Debentures due 2054.
- Repayment of approximately $670 million on the Margin Loan Agreement.
- Net borrowings of approximately $30 million on the Senior Credit Facility.
Liberty Broadband maintains a balanced approach between debt financing and equity funding. The company has leveraged its equity to support growth initiatives, while managing its debt levels prudently. This strategy is reflected in the company's credit ratings, which have remained stable, reflecting a healthy financial position.
As of September 30, 2024, Liberty Broadband's cash and cash equivalents totaled $168 million, providing a buffer against its debt obligations. The company anticipates using its liquidity for potential stock repurchases and capital expenditures of approximately $20 million in the near term.
Assessing Liberty Broadband Corporation (LBRDK) Liquidity
Assessing Liberty Broadband Corporation's Liquidity
Current Ratio: As of September 30, 2024, the current ratio is calculated as follows:
| Current Assets (in millions) | Current Liabilities (in millions) | Current Ratio |
|---|---|---|
| $4,492 | $13,160 | 0.34 |
The current ratio indicates a potential liquidity concern, as a ratio below 1 suggests that current liabilities exceed current assets.
Quick Ratio: The quick ratio for Liberty Broadband Corporation is not directly provided in the financial statements. Typically, it is calculated by excluding inventories from current assets. However, given the nature of the business, a rough estimate can be made by considering cash and cash equivalents and receivables against current liabilities.
Cash and Cash Equivalents: As of September 30, 2024, cash and cash equivalents are reported at $168 million.
Quick Ratio Calculation:
| Cash and Cash Equivalents (in millions) | Current Liabilities (in millions) | Quick Ratio |
|---|---|---|
| $168 | $13,160 | 0.013 |
This indicates significant liquidity concerns, as the quick ratio is much lower than the ideal benchmark of 1.
Analysis of Working Capital Trends
Working capital is defined as current assets minus current liabilities. As of September 30, 2024:
| Current Assets (in millions) | Current Liabilities (in millions) | Working Capital (in millions) |
|---|---|---|
| $4,492 | $13,160 | ($8,668) |
This negative working capital suggests that Liberty Broadband may face challenges in meeting short-term obligations.
Cash Flow Statements Overview
For the nine months ended September 30, 2024, the cash flow trends are as follows:
| Cash Flow Type | Net Cash Provided by (Used in) (in millions) |
|---|---|
| Operating Activities | $103 |
| Investing Activities | $69 |
| Financing Activities | ($174) |
The net cash provided by operating activities indicates a positive trend, while the negative cash flow from financing activities could raise concerns regarding the company's ability to manage its financial obligations effectively.
Potential Liquidity Concerns or Strengths
- Cash and Cash Equivalents: The company holds $168 million in cash and cash equivalents, which provides a buffer but is insufficient against liabilities.
- Debt Levels: Total debt as of September 30, 2024, stands at $3,642 million, which poses a risk given the liquidity metrics.
- Interest Payments: Projected interest payments for the remainder of 2024 are approximately $60 million.
- Capital Expenditures: The company anticipates net capital expenditures of about $20 million.
Overall, while the operating cash flow is positive, the liquidity ratios and working capital trends indicate potential challenges ahead for the company.
Is Liberty Broadband Corporation (LBRDK) Overvalued or Undervalued?
Valuation Analysis
To assess whether Liberty Broadband Corporation (LBRDK) is overvalued or undervalued, we will analyze its key financial ratios, stock price trends, dividend yield, and analyst consensus.
Price-to-Earnings (P/E), Price-to-Book (P/B), and Enterprise Value-to-EBITDA (EV/EBITDA) Ratios
- P/E Ratio: As of September 30, 2024, the P/E ratio stands at 24.2, compared to 20.3 at the same time last year.
- P/B Ratio: The P/B ratio is currently 1.8, which is an increase from 1.6 in 2023.
- EV/EBITDA Ratio: The EV/EBITDA ratio is reported at 15.6, up from 14.9 in the previous year.
Stock Price Trends
The stock price of LBRDK has shown the following trends over the past 12 months:
- 12-month high: $112.50
- 12-month low: $85.00
- Current stock price (as of September 30, 2024): $102.00
Dividend Yield and Payout Ratios
Regarding dividends, Liberty Broadband has a dividend yield of 0.43% with a dividend payout ratio of 12% based on the last declared dividend of $0.44 per share paid on October 15, 2024.
Analyst Consensus on Stock Valuation
Analyst ratings for LBRDK are as follows:
- Buy: 10 analysts
- Hold: 5 analysts
- Sell: 1 analyst
| Metric | Value |
|---|---|
| P/E Ratio | 24.2 |
| P/B Ratio | 1.8 |
| EV/EBITDA Ratio | 15.6 |
| 12-Month High | $112.50 |
| 12-Month Low | $85.00 |
| Current Stock Price | $102.00 |
| Dividend Yield | 0.43% |
| Dividend Payout Ratio | 12% |
| Buy Ratings | 10 |
| Hold Ratings | 5 |
| Sell Ratings | 1 |
Key Risks Facing Liberty Broadband Corporation (LBRDK)
Key Risks Facing Liberty Broadband Corporation (LBRDK)
Overview of Internal and External Risks
The financial health of Liberty Broadband Corporation is impacted by various internal and external risks. Key external risks include:
- Industry Competition: The competitive landscape in the telecommunications sector remains intense, with key players consistently innovating and reducing prices to capture market share.
- Regulatory Changes: Changes in federal and state regulations can affect operational costs and market strategies.
- Market Conditions: Economic downturns can lead to reduced consumer spending on broadband services, impacting revenue growth.
Internally, the company faces:
- Operational Risks: Challenges in integrating new technologies and maintaining service quality can affect customer retention.
- Financial Risks: The company carries a significant amount of debt, with long-term debt reported at $93.5 billion as of September 30, 2024.
Discussion of Operational, Financial, or Strategic Risks
In the recent earnings report, several operational risks were highlighted:
- Operating income for the three months ended September 30, 2024, was $30 million, an increase from $21 million in the same period of 2023.
- Net cash provided by operating activities was $103 million for the nine months ended September 30, 2024, compared to a cash usage of $(46) million in the prior year.
Financial risks are evidenced by:
- Interest Expense: Interest expenses have decreased to $46 million for the three months ended September 30, 2024, from $54 million in 2023.
- Share of Earnings of Affiliate: This metric increased to $346 million for the three months ended September 30, 2024, compared to $326 million in the previous year.
Mitigation Strategies
The company has implemented several strategies to mitigate these risks:
- Investment in technology upgrades to enhance service quality and customer experience.
- Diversification of service offerings to reduce dependence on traditional broadband revenue.
- Active management of debt levels, with significant repurchases of debentures amounting to $300 million in 2024.
Financial Data Summary
| Financial Metric | 2024 (Q3) | 2023 (Q3) |
|---|---|---|
| Net Earnings | $142 million | $162 million |
| Long-term Debt | $93.5 billion | $95.8 billion |
| Operating Income | $30 million | $21 million |
| Net Cash from Operating Activities | $103 million | $(46) million |
| Interest Expense | $46 million | $54 million |
Future Growth Prospects for Liberty Broadband Corporation (LBRDK)
Future Growth Prospects for Liberty Broadband Corporation
Analysis of Key Growth Drivers
The primary growth drivers for Liberty Broadband Corporation include its strategic investments and partnerships, particularly in the telecommunications sector. The company holds approximately 32% ownership in Charter Communications, contributing significantly to its revenue growth.
In the third quarter of 2024, Charter reported revenues of $13.8 billion, up from $13.6 billion in the same period of 2023, indicating a growth of 1.6%. This growth was primarily attributed to an increase in mobile lines and average revenue per customer, despite a decrease in total customers.
Future Revenue Growth Projections and Earnings Estimates
Analysts project robust revenue growth for Liberty Broadband, with a compound annual growth rate (CAGR) of 5% expected over the next five years, driven by increased demand for broadband and telecommunications services. The estimated earnings per share (EPS) for the fiscal year 2024 is around $4.04, compared to $3.31 in 2023.
Strategic Initiatives or Partnerships that May Drive Future Growth
Liberty Broadband continues to pursue strategic initiatives such as enhancing its investment in Charter and exploring further acquisitions in the telecommunications space. The company has also engaged in share repurchase programs, with approximately $300 million in repurchases executed in 2024 to enhance shareholder value.
Competitive Advantages that Position the Company for Growth
Liberty Broadband's competitive advantages include its substantial equity stake in Charter Communications, which provides it with a strong revenue stream and operational synergies. The company reported a net income of $1.474 billion for the three months ended September 30, 2024, up from $1.436 billion in the same period of 2023. This financial strength, combined with its strategic positioning in the broadband market, underpins its growth potential.
| Metric | 2024 (Projected) | 2023 (Actual) | Growth Rate |
|---|---|---|---|
| Revenue | $13.8 billion | $13.6 billion | 1.6% |
| Net Income | $1.474 billion | $1.436 billion | 2.6% |
| Estimated EPS | $4.04 | $3.31 | 21.0% |
| Share Repurchases | $300 million | N/A | N/A |
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Updated on 16 Nov 2024
Resources:
- Liberty Broadband Corporation (LBRDK) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Liberty Broadband Corporation (LBRDK)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Liberty Broadband Corporation (LBRDK)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.