GCI Liberty, Inc.

GCI Liberty, Inc. operates as a holding company, primarily consisting of 100% of the outstanding equity interests in GCI, LLC, GCI Holdings, LLC, and their subsidiaries (collectively, the "GCI Business") ¹. The GCI Business provides a full range of data, wireless, voice, and managed services to residential customers, businesses, governmental entities, and educational and medical institutions, primarily in Alaska, under the GCI brand ². The company's operations are geographically concentrated in Alaska, making its growth dependent on the economic conditions of the state, which has been negatively impacted by a recession in recent years ³.

GCI Holdings operates in an intensely competitive industry, facing competition from existing providers and new entrants due to rapidly developing technologies ⁴. For residential customers, GCI's internet services compete with fiber-to-the-home, fixed wireless broadband, low earth orbit (LEO) or geostationary satellite internet, and digital subscriber line (DSL) services ⁵. Mobile services face competition from national mobile network operators like AT&T Inc. and Verizon Communications Inc., as well as regional operators and mobile virtual network operators (MVNOs) ⁶. Voice services compete with wireless and wireline phone providers, over-the-top phone providers, and alternative communication options such as text messaging, instant messaging, social networking, video conferencing, and email ⁷. The company also faces competition from other regional competitors offering bundled services and from providers receiving federal grants to construct additional terrestrial networks ⁸.

The core business model of GCI Liberty is to generate revenue through monthly fees for data, wireless, voice, and managed services, supplemented by universal service subsidies from federal and state agencies ⁹. The company focuses on selling new and enhanced services and products to its existing customer base through coordinated customer service and sales and marketing efforts, leveraging an integrated approach to customer service to foster loyalty ¹⁰. GCI Holdings also actively pursues government grants to fund rural expansion, particularly for broadband infrastructure in unserved and underserved communities in rural Alaska ¹¹.

GCI Holdings' revenue is primarily derived from data services, which constituted 71% of total revenue in 2025 ¹², followed by wireless services at 24% ¹³, and other services at 5% ¹⁴. In 2024, these figures were 70% for data services ¹⁵, 23% for wireless services ¹⁶, and 7% for other services ¹⁷. The company has fully exited the video business as of December 31, 2025, after receiving regulatory approval ¹⁸.

For the year ended December 31, 2025, total revenue was $1,046 million ¹⁹, an increase from $1,016 million in 2024 ²⁰. Operating expenses (exclusive of depreciation and amortization) decreased to $523 million in 2025 from $539 million in 2024 ²¹. Selling, general and administrative expense increased to $120 million in 2025 from $117 million in 2024 ²². Stock-based compensation remained flat at $13 million for both years ²³. Depreciation and amortization increased to $212 million in 2025 from $207 million in 2024 ²⁴. The company recorded an impairment of goodwill and intangible assets of $525 million in 2025, compared to zero in 2024 ²⁵. This resulted in an operating loss of $347 million in 2025, a significant decrease from operating income of $140 million in 2024 ²⁶. Net loss for 2025 was $309 million ²⁷, compared to net earnings of $70 million in 2024 ²⁸. Basic and diluted EPS were both $(9.97) in 2025 ²⁹ and $2.26 in 2024 ³⁰. Adjusted OIBDA increased to $403 million in 2025 from $360 million in 2024 ³¹. Cash and cash equivalents stood at $416 million as of December 31, 2025 ³², up from $74 million in 2024 ³³. Total debt outstanding was approximately $971 million as of December 31, 2025 ³⁴. Net cash provided by operating activities increased to $370 million in 2025 from $278 million in 2024 ³⁵. Net cash used in investing activities was $218 million in 2025 ³⁶ and $193 million in 2024 ³⁷. Net cash provided by financing activities was $202 million in 2025 ³⁸, compared to net cash used of $107 million in 2024 ³⁹.

Year-over-year, consumer data revenue decreased by $8 million in 2025, primarily due to a decrease in subscribers and the discontinuation of the Affordable Connectivity Program ⁴⁰. Consumer wireless revenue increased by $16 million, driven by increased wireless USF support for high-cost areas ⁴¹. Consumer other revenue decreased by $17 million, mainly due to the discontinuation of video services ⁴². Business data revenue increased by $43 million, primarily from service upgrades with existing healthcare and education customers ⁴³. Business wireless revenue decreased by $6 million, due to contractual changes in roaming revenue, partially offset by increased wireless USF support ⁴⁴. Business other revenue increased by $2 million, attributed to the recognition of grant money ⁴⁵. Operating expense decreased by $16 million, with consumer direct costs decreasing by $13 million due to lower video programming and distribution costs, and business direct costs decreasing by $13 million due to lower distribution costs for healthcare and education customers ⁴⁶. Technology expense increased by $10 million due to higher maintenance, software, and external labor costs ⁴⁷. Selling, general and administrative expense increased by $3 million due to increased corporate expenses related to the Services Agreement and public company costs, and higher personnel expenses ⁴⁸. Interest expense decreased by $4 million due to lower interest rates on variable rate debt and reduced outstanding amounts on the Senior Credit Facility ⁴⁹.

During 2025, GCI Liberty completed its Separation from Liberty Broadband Corporation on July 14, 2025, which involved an internal reorganization, a Preferred Stock Sale of 10,000 shares of non-voting preferred stock with a 12% dividend rate and $1,000 per share liquidation price ⁵⁰, and a reclassification of common stock to facilitate the distribution of GCI Group common stock to Liberty Broadband shareholders ⁵¹. The company also conducted a rights offering that commenced on November 26, 2025, distributing 0.3838 of a Series C GCI Group Right for each share of GLIBA, GLIBB, or GLIBK held as of November 24, 2025 ⁵². Each whole right allowed purchase of one GLIBK share at $27.20, an approximate 20% discount to the volume weighted average trading price of GLIBK for the ten-day period ending November 21, 2025 ⁵³. The offering was fully subscribed, issuing 11,059,127 shares of GLIBK and generating approximately $300 million in proceeds ⁵⁴. GCI Holdings fully exited the video business as of December 31, 2025, after receiving regulatory approval on May 5, 2025 ⁵⁵. The company also settled a matter with the FCC's Enforcement Bureau on August 8, 2025, for $10,000 and a three-year consent decree, related to an expired submarine cable landing license ⁵⁶. During the third quarter of 2025, the company recorded impairments of $108 million for goodwill, $401 million for cable certificates, and $16 million for other indefinite-lived intangible assets ⁵⁷.

GCI Liberty expects to incur corporate overhead expenses of approximately $5 million annually as a standalone public company ⁵⁸. The fees payable to Liberty Media for public company support services under the Services Agreement are not expected to exceed approximately $5 million for the first year ⁵⁹. The approximate $300 million in proceeds from the rights offering will be used for general corporate purposes, which may include working capital, capital expenditures, and repayment or refinancing of outstanding indebtedness ⁶⁰. GCI Liberty may also use a portion of the net proceeds for potential strategic acquisitions, investments, or partnerships ⁶¹.

GCI Holdings expects to continue adding new products to its product portfolio and assessing revenue-enhancing opportunities that create value for its customers ⁶². Where feasible and economically supported, it plans to pursue opportunities to increase the scale of its facilities, enhance service to existing customers, and attract new customers ⁶³. The company actively pursues government grants to fund rural broadband infrastructure expansion in unserved and underserved communities in rural Alaska ⁶⁴. The Alaska Connect Fund Order for wireline providers maintains existing funding and performance requirements through 2028, but support levels and obligations starting in 2029 have not yet been set by the FCC and could impact GCI Holdings' ability to continue providing local telephone service in areas relying on high-cost support ⁶⁵. For mobile services, support may be reduced after 2026 in areas deemed ineligible or served by multiple providers, based on a competitive selection process still pending FCC consideration ⁶⁶. Continuation of high-cost support after 2026 for mobile service and after 2028 for fixed voice and broadband service is contingent upon obtaining FCC approval for performance plans ⁶⁷.

The company expects GCI's Other revenue, which includes long-distance and local access services, to continue to decline due to decreases in voice subscribers, consistent with the industry ⁶⁸. This decline may accelerate due to increased competition from wireless carriers and GCI's own product offerings ⁶⁹.

The projected uses of cash and restricted cash in 2026 include net capital expenditures of approximately $290 million ⁷⁰, approximately $50 million for interest payments on outstanding debt ⁷¹, reimbursements to Liberty Media for various agreements, and funding potential investment opportunities at GCI Liberty ⁷². The total unrecognized compensation cost related to unvested Awards was approximately $29 million as of December 31, 2025, which will be recognized over a weighted average period of approximately 1.8 years ⁷³. The company expects corporate cash and other available sources of liquidity to cover corporate expenses for the foreseeable future ⁷⁴.

GCI Liberty faces substantial competition in the telecommunications industry, including from national carriers in Alaska offering more flexible subscription packages and exclusive content, direct-to-user non-geostationary satellite-based internet providers, and other providers receiving federal grants to construct additional terrestrial networks, which could reduce market share and harm financial performance ⁷⁵. The company's operations are geographically concentrated in Alaska, making it vulnerable to the state's economic conditions, which have been negatively impacted by a recession ⁷⁶. Volatility in oil prices, and particularly a decline, could significantly pressure the Alaska state government budget, and a reduction in U.S. government federal funding could materially adversely impact the state and GCI ⁷⁷. Inflationary pressures on input costs and labor, which GCI experienced in 2024 and 2025 and expects to continue into 2026, could negatively affect affordability and demand for services, and increase costs, potentially impacting margins if not passed to customers ⁷⁸. The company relies on roaming agreements with other carriers for nationwide coverage, and inability to obtain or maintain these on cost-effective terms could limit competitiveness, increase customer turnover, and decrease revenue ⁷⁹. GCI's business is extensively regulated by federal, state, and local governments, and changes to or interpretations of existing regulations, or adoption of new ones, could adversely affect its business, financial position, results of operations, or liquidity ⁸⁰. A successful legal challenge to the constitutionality of the Universal Service Fund (USF) program, which was reversed by the Supreme Court on June 27, 2025, but is subject to continuing litigation in the Fifth Circuit, could disrupt GCI's USF support, which constituted 46% and 42% of its revenue for 2025 and 2024, respectively, and for which it had $96 million in net receivables at December 31, 2025 ⁸¹. Failure to comply with USF program requirements could result in denial of funding, disgorgement of amounts received, invalidation of contracts, and imposition of fines or penalties ⁸². Loss of Eligible Telecommunications Carrier (ETC) status would disqualify GCI from high-cost and low-income USF support ⁸³. A disruption in the payment of USF support or federal grants, potentially through Executive Branch action, could delay or halt these payments ⁸⁴. GCI may not meet performance plan milestones under the Alaska High Cost Order, potentially requiring repayment of 1.89 times the average support per location for missed deployments, plus a possible 10% penalty of total support, and a fine of up to $58.6 million and an additional $7,951 per resident missed ⁸⁵. GCI may lose USF high-cost support after 2026 for mobile services and after 2028 for fixed services if certain competitive conditions are met or if performance plans are not approved by the FCC ⁸⁶. The decline in GCI's Other revenue, including long-distance and local access services, is expected to continue and may accelerate ⁸⁷. Failure to stay abreast of new technology, including 4G and 5G wireless broadband services and AI, could affect GCI's ability to compete, requiring significant capital expenditures for upgrades that may not be recoverable due to competitive or regulatory constraints ⁸⁸. GCI's technical infrastructure is vulnerable to damage or interruption from technology failures, natural disasters (such as Typhoon Halong in October 2025), human error, terrorism, or intentional wrongdoing, potentially leading to substantial restoration costs and service disruptions ⁸⁹. The company is self-insured for damage or loss to certain transmission facilities, which could lead to substantial uninsured liabilities ⁹⁰. GCI depends on a limited number of third-party vendors for communications equipment, and supply chain disruptions, vendor failures, or changes in trade policies could impair its ability to meet customer demand and increase costs ⁹¹. Cybersecurity threats, including cyberattacks and network disruptions, are evolving and could lead to equipment failures, operational disruptions, unauthorized access to data, increased costs, litigation, regulatory actions, fines, and reputational damage ⁹². The use of AI in GCI's business presents risks of flawed algorithms, unintended consequences, and potential legal or regulatory actions ⁹³. The processing, storage, sharing, use, disclosure, and protection of personal data are subject to evolving federal, state, and international laws, and non-compliance or security compromises could result in fines, legal proceedings, and reputational damage ⁹⁴. Increases in data usage on GCI's networks may cause capacity limitations, requiring significant capital expenditures or network management practices that could negatively affect customer retention and attraction ⁹⁵. The company had $971 million principal amount of debt outstanding as of December 31, 2025, and significant indebtedness could increase vulnerability to adverse economic conditions, require a substantial portion of cash flow for debt service, expose it to interest rate risk, and limit its ability to obtain additional financing or pursue strategic opportunities ⁹⁶. The fair values of goodwill and other intangible assets, which totaled $812 million as of December 31, 2025 ⁹⁷, do not significantly exceed their carrying values after impairments of $525 million in 2025 ⁹⁸, and future outlook declines could result in additional material impairment charges ⁹⁹.

Management emphasizes GCI Holdings' role as a provider of data, wireless, voice, and managed services primarily in Alaska, noting its full exit from the video business as of December 31, 2025 ¹⁰⁰. Key drivers of revenue are identified as monthly fees for services and universal service subsidies ¹⁰¹. Management highlights the need to stay abreast of rapidly evolving technological developments and offerings to remain competitive and increase utility of products and services ¹⁰². The company acknowledges the impact of Alaska's economic conditions, including recessionary pressures, volatility in oil prices, and inflation, on the affordability and demand for its services and its cost of doing business ¹⁰³. Management is closely monitoring inflation-sensitive items and their potential impact on costs and margins ¹⁰⁴. The company also notes the ongoing legal challenges to the constitutionality of the USF program and the potential for disruptions in federal financial assistance, which could materially affect its business ¹⁰⁵. Management expects GCI's Other revenue, including long-distance and local access services, to continue to decline due to decreases in voice subscribers and increased competition ¹⁰⁶. For 2026, management projects net capital expenditures of approximately $290 million and approximately $50 million for interest payments on outstanding debt ¹⁰⁷.