Liberty Latin America Ltd. (LILA) Earnings

Management highlights

### Consumer & Residential Operations - Announced a new mobile partnership with Starlink in Panama, following a prior partnership in Costa Rica, with commercial launch planned for H2 2026; price increases have already been applied to reflect the improved offering. Early feedback on fixed price increases implemented in July has been supportive. - Panama added 10,000 residential broadband gross subscribers in Q2, with lower churn compared to Q1, and strong net additions for video and voice services. B2B pipeline remains healthy, with activity weighted to H2, consistent with historical cycles. - Liberty Costa Rica added 2,000 broadband gross subscribers in Q2, with relatively stable sequential fixed subscription revenue. A temporary planned pause in postpaid sales during Q2 (to migrate to new cost-saving sales channels) impacted results, but July run rates have returned to historic levels. - Liberty Puerto Rico achieved three consecutive quarters of positive postpaid subscriber additions, with significantly improved churn. As of end of July, Liberty is a net gainer in porting against both competitors for the first time post-migration, supported by its SIM-only Liberty Simple offer. Prepaid subscriber base has stabilized after migration. - Liberty Puerto Rico reduced broadband churn for the third consecutive quarter (one of the lowest churn rates in the LLA group), and achieved two consecutive quarters of positive video net additions, driven by 50% higher growth additions and stabilized churn. A $2 per month rate increase was implemented across the TV portfolio. ### Wholesale & Networks Operations - Liberty Networks delivered 14% year-over-year wholesale revenue growth, driven by milestone progress on the El Salvador government project, and continued strong demand from international/regional carriers and hyperscalers. - The company is launching the 378km Phoenix submarine cable with Khan TV to directly access the Caracas, Venezuela market, a modest investment that positions the business to capture growth as Venezuela's economy recovers. - Liberty Networks enterprise revenue grew 3% year-over-year, with strength in IT services. The segment is a strong cash generator with high margins, and the company prioritizes value-accretive network expansion. ### Financial & Capital Updates - Q2 P&E additions were $179 million ($289 million year-to-date), representing 16% and 13% of revenue respectively. Full-year P&E as a percentage of revenue is expected to remain consistent with 2025 levels, with higher spend expected in H2 2026. - Adjusted FCF before distributions increased to $83 million in Q2, and $19 million for H1, representing $124 million and $164 million year-over-year increases respectively, driven by stronger operating cash flow and improved working capital. - Consolidated net leverage is 4.6x, with $8.5 billion in total debt and $700 million in cash, and $900 million in available borrowing capacity. Excluding Puerto Rico, consolidated net leverage falls to the mid-threes. - Liberty Puerto Rico secured $350 million in new near-term funding (a $140 million 2030 revolving credit facility and a $200 million senior secured term loan, $150 million drawn) to address liquidity needs. - The company distributed ~$500 million notional value of 9% dividend preferred stock to common shareholders, and has repurchased over $60 million in common equity year-to-date Q3, with ~$140 million remaining under repurchase authorization, remaining opportunistic. ### Strategic Initiatives - The company exited the Peruvian market via sale to the Slim family/Claro, as the market was overcrowded with no clear path to consolidation that would deliver acceptable returns. - The company entered a transformative IT/back-office partnership with Amdocs to modernize legacy systems, with AI capabilities tailored for telecom, with transition starting in Q4 2026 and cost savings beginning the same quarter, with 250 million NPV of total benefits.

Guidance

- Full-year 2026 capital expenditures as a percentage of revenue is expected to remain within the same range as 2025, with higher capex in H2 2026 than H1, consistent with historical seasonality. - Adjusted FCF for full-year 2026 remains heavily weighted to Q4, consistent with prior years, but H2 2026 FCF is expected to be less robust than H2 2025, due to lapping the $81 million weather derivative payout received in Q4 2025 and planned vendor financing amortization in H2 2026. - Management expects to see continued improvement in Liberty Caribbean (Jamaica) results post-Hurricane Melissa, with full recovery near completion by Q3 2026, and much improved results in Q4 2026. - Management expects continued operational progress and strong performance in H2 2026 across core markets, building on H1 2026 momentum to set up positive momentum entering 2027.

Segment performance

Consolidated Q2 2026 total revenue was $1.1 billion, up 1% reported and flat on a rebased basis. Adjusted EBITDA was $436 million, with 3% rebased year-over-year growth, and consolidated adjusted EBITDA margin improved 130 bps year-over-year to 40%. 1. **Liberty Caribbean (C&W Credit Silo)**: $362 million in revenue, $165 million in adjusted EBITDA, with rebased year-over-year declines. A $6 million net negative impact from Hurricane Melissa drove the declines, while residential mobile delivered 4% rebased revenue growth. 2. **Panama (C&W Credit Silo)**: $177 million in revenue, $65 million in adjusted EBITDA. Revenue was flat year-over-year (lower B2B revenue offset modest residential, mobile, and fixed growth), and adjusted EBITDA was down 5% year-over-year. Margin remained healthy at 37%. 3. **Liberty Networks (C&W Credit Silo)**: $130 million in revenue, $67 million in adjusted EBITDA, representing 10% rebased revenue growth and 9% rebased adjusted EBITDA growth. Wholesale revenue grew 14% rebased, and enterprise revenue grew 3% rebased. This was the highest growth segment across the LLA Group in Q2. *Aggregate C&W Credit Silo: $649 million in revenue (up 1% rebased), $297 million in adjusted EBITDA (down 2% rebased).* 4. **Liberty Costa Rica**: $169 million in Q2 revenue, $64 million in adjusted EBITDA. Revenue was flat rebased (6% residential mobile growth offset declines in fixed and B2B), while adjusted EBITDA grew 7% rebased with 200 bps of margin expansion to 38%, driven by cost reduction initiatives. 5. **Liberty Puerto Rico**: $288 million in Q2 revenue (5% year-over-year rebased decline), $93 million in adjusted EBITDA (7% year-over-year rebased growth). Adjusted EBITDA margin expanded to 32% from 29% in the prior year. Q2 adjusted FCF for Liberty Puerto Rico was negative $48 million, and negative $91 million year-to-date.

Risks & headwinds

- Hurricane and severe weather events present ongoing operational and financial risks to the company's Caribbean and Latin American markets. Hurricane Melissa caused a $6 million net negative impact to Liberty Caribbean's Q2 2026 revenue and adjusted EBITDA, and the October 2025 Hurricane in Jamaica continues to result in residual operational drag. - Liberty Puerto Rico's capital structure creates a drag on consolidated LLA common equity, and requires ongoing negotiations with debt counterparties to reach a resolution, with uncertainty around the timing and final outcome of any restructuring or potential spin-off. - Elevated competition in postpaid mobile markets, particularly in Costa Rica, creates pressure on subscriber growth and ARPU. - Geopolitical instability in Venezuela creates uncertainty for the new Phoenix submarine cable project, which is still in early stages of market entry. - Overly crowded, irrational competitive markets with unfavorable regulatory environments can erode returns, as seen in the prior Peruvian investment that ended in divestment.

Analyst Q&A

• Q: How is LLA's Starlink partnership differentiated from the competitive threat Starlink poses to US cable operators, and how will the partnership evolve? /

  A: Management views Starlink as a complementary add-on to LLA's existing ground-based product line, not a replacement. LLA is a major employer and economic contributor in its operating markets, with strong government relationships, making these markets more protected from large-scale satellite competition than US markets. Management sees satellite operators permanently filling coverage gaps rather than displacing terrestrial infrastructure. /

• Q: Is Liberty Networks on track for sustained high single-digit to low double-digit growth, and what is the strategic priority for this segment? /

  A: Management confirmed growth is accelerating, with new network routes under development across Colombia, Mexico, Panama, Florida, El Salvador, and Venezuela. The segment has extremely high cash conversion and operating margins, with incremental OpEx increases minimal after initial capex for new routes, delivering higher returns than the core consumer business. LLA has strengthened the management team for Liberty Networks and will continue to prioritize further investment. /

• Q: What is the update on Puerto Rico's strategic process including a potential spin-off, and what is the pace of the remaining common stock buyback? /

  A: Management will remain opportunistic and disciplined with buybacks, noting common equity is currently undervalued, so buybacks are the top capital priority right now, with all prior repurchases in the money. For Puerto Rico, operational performance has improved significantly, but the capital structure remains unresolved. The business is self-funded, and management is working with debt counterparties to reach a resolution by 2027, with a spin-off one of multiple potential options. /

• Q: What is the outlook for Jamaica's recovery post-hurricane, and do you see any issues with future weather insurance availability? /

  A: Jamaica's business operations are nearly back to pre-hurricane strength, with mobile market share and ARPU already improved, B2B fully recovered, and fixed operations expected to be nearly fully rebuilt by Q3. The company already locked in cost-effective parametric hurricane insurance for the 2026 season, consistent with prior coverage levels, and no availability issues are expected. Management proactively monitors hurricane patterns to prepare for severe weather events.