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7,700 | VZ | 3 | 2,024 | 2024-10-22 09:00:00 | Verizon Communications Inc. | 415,798 | Tony Skiadas: Thanks, Sampath and good morning. So our execution, as Sampath said is really strong, and it's fueling the momentum in our business. Our third quarter results, before we get into it, I do want to talk about the third quarter. Our ability to demonstrate customer growth and financial growth once again is a hallmark to our testament of execution day in and day out. And we delivered the highest ever reported adjusted EBITDA in our quarter. We're on track, as Hans mentioned, with our 2024 guidance, and at/or above the midpoint of our guided range for both wireless service revenue and adjusted EBITDA. If I go to the operational metrics from mobility, if you think about business and consumer, gross add and churn both improved year-over-year and that drove phone net adds of 239,000 in the third quarter. That's a significant improvement year-over-year. And as Sampath mentioned, we expect the consumer business to have positive postpaid phone net adds for the full year, and that's with and without the second number offering. And that's in addition to the continued strength in phone net adds from our business segment, and that's quarter after quarter of strong growth. If you think about broadband, we have almost 12 million subscribers in our base, and Fios and FWA are both growing. On broadband, we had 389,000 net adds in the quarter. That's another strong quarter for us. And inside of that, if you think about FWA, we've grown our FWA subscriber base over 1.5 million in that time period. And as you heard from the team today, there's much more opportunity for us to expand further. If we move to the financials, Hans talked about how we're measured, service revenue, EBITDA and free cash flow. If I start with service revenue, our service revenue is very healthy. Our wireless service revenue was up 3.1% year-to-date or $1.8 billion. Our EBITDA continues to be strong. And even in a quarter where we delivered a very strong $12.5 billion of adjusted EBITDA, we took actions around revenue and cost efficiencies to set |
7,701 | VZ | 3 | 2,024 | 2024-10-22 09:00:00 | Verizon Communications Inc. | 415,798 | where we delivered a very strong $12.5 billion of adjusted EBITDA, we took actions around revenue and cost efficiencies to set us up for 2025. That strong EBITDA led to free cash flow of $14.5 billion year-to-date, and that's consistent with the prior year. And that includes an increase of $2.5 billion in cash taxes. The cash generation of the business continues to be very strong, and we have ample flexibility and funding to execute on our capital allocation priorities. The business is performing well, and we have good momentum as we close 2024 and head into 2025. And if I shift over to capital allocation, as many of you know, we have four capital allocation priorities and they remain unchanged. Our first capital allocation priority is to invest in the business. And that includes investments in our network infrastructure. If you think about C-Band, if you think about Fios, it includes M&A to accelerate our strategy. If you think about the pending acquisition of Frontier, and it also includes being opportunistic with wireless spectrum as evidenced by the deal we signed last week with US Cellular. As we said before, we're back to BAU levels of capital spend, and we're on track with our 2024 capital program. If we look ahead to 2025 in terms of guidance for 2025, we expect 2025 capital expenditures to be in the range of $17.5 billion to $18.5 billion for the next year. And that's an all-in number that includes all of our growth initiatives. So that includes C-Band and the continuation of rolling out C-Band. Joe talked about having 80% to 90% of our sites on C-Band by the end of 2025. It includes our Fios continued open-for-sale expansion up to 650,000 new open for sale on Fios. And it includes the broadband MDU solution, the multi-dwelling solution that Joe mentioned. All of these things are included in that 17.5 to 18.5 number. And that range gives us the flexibility to both invest for growth and be disciplined and efficient with our capital spend. Our second priority is our commitment to the dividend. And as |
7,702 | VZ | 3 | 2,024 | 2024-10-22 09:00:00 | Verizon Communications Inc. | 415,798 | growth and be disciplined and efficient with our capital spend. Our second priority is our commitment to the dividend. And as you've seen recently, we've raised dividend for the 18th consecutive year. That's an accomplishment we're extremely proud of. And as we said many times, our goal is to put the Board a position for further dividend increases. Our third capital allocation priority is having a strong balance sheet. We've made significant progress delevering the balance sheet since the acquisition of C-Band. As of the of the end the third quarter, our unsecured leverage stands at 2.50 times. That's the ratio of net unsecured debt to adjusted EBITDA. Our focus is to continue to pay down debt between now and the closing of the Frontier deal. And today, we're announcing an update to our long-term leverage target of 2.0 to 2.25 times. Given our cash flows and overall financial strength, this is the appropriate range for our business to provide flexibility to invest for growth and return capital to shareholders. Our fourth capital allocation priority is share buybacks. And as we've said many times, we will consider share buybacks but our unsecured leverage metric reaches 2.25 times, and that target is unchanged. As we work towards that target, we continue to focus on generating strong cash flows and paying down debt. Our capital allocation strategy is disciplined and deliberate. And as you've seen from our track record, we'll continue to focus on operational execution and performance and deliver on our commitments. We're excited about the opportunities we have ahead. And with that, I'll turn it back to Hans. |
7,703 | VZ | 3 | 2,024 | 2024-10-22 09:00:00 | Verizon Communications Inc. | 415,798 | Hans Vestberg: Thank you, Tony. Let me summarize updates before we come to Q&A. I think you hopefully got a feeling that we are setting us up well for 2025 and beyond to continue the leadership in this market and extend it. So we talked about the networks that we're building. It should be the best and the best performing. I think that's been a focus. And really now with the C-Band coming quickly and our Fios build-out, we feel really good about it. It's been important for us to focus the last couple of years on the differentiated value proposition for our customers. We know that there are more important services than ever. To have mobility and broadband is a necessity for every organization, every person on this planet and in the United States. The differentiating offerings that we're doing are enormously important, and they come from deep research what our customer really wants. And of course, together with a refreshed brand should support us for the continuation. Tony talked about capital allocation, and you have seen us being very prudent by the capital allocation. We promised to come down to BAU levels, we're on BAU levels. We have the high [indiscernible] C-band because we saw a great opportunity to quickly come out with that, and that were coming down. We're now doing investment to expand our total addressable market with the same offering, the same network. That's the strategy we have. We stay there and we see that we can continue to grow well and continue to create profitability and cash flow. So that's the overall strategy. And we are measured on three things: the wireless service revenue, the adjusted EBITDA and the cash flow. And we are very committed, the whole team here to continue to grow the service revenue and expand the EBITDA and cash flow going into 2025 and onwards with the investments we're doing right now and where we stand with our strategy, where we stand with our assets and we stand with our offering. So all in all, we feel very positive where we are right now. We feel positive where the |
7,704 | VZ | 3 | 2,024 | 2024-10-22 09:00:00 | Verizon Communications Inc. | 415,798 | assets and we stand with our offering. So all in all, we feel very positive where we are right now. We feel positive where the market is and our products. By that, I'm going to close, and we're going to have a open Q&A. Brady will help us to manage that. I have my whole management team here, and we even have a pictures on them, if you don't know who they are. They are sitting to the left here for the ones on the webcast. You can see them here. So they are all here. So I'm going to diligently distribute answers to them. Probably going to take some myself. Any questions you might have for us. Brady going to do it, remember, present yourself when you're going to answer, so the webcast audience know who is asking the question. |
7,705 | VZ | 3 | 2,024 | 2024-10-22 09:00:00 | Verizon Communications Inc. | 415,798 | A - Brady Connor: Okay. So I love the folks in the front row, but we're going to go back right to start with Simon. And again, just please announce your name and firm and since you're not on the camera.
Simon Flannery: Great. Thanks very much. Simon Flannery, Morgan Stanley. Hans, I was interested in your latest thoughts on the BEAD program. You're clearly leaning into broadband. We're starting to see some of the states open up their processes. So how do you think about that as an opportunity beyond this? And then the other question would be around these markets like the Northeast where you have fixed wireless and fiber. How do you start to bifurcate that opportunity? Because I think in the past, if you had fiber, you hadn't really done fixed wireless. But does that start to blend a bit? |
7,706 | VZ | 3 | 2,024 | 2024-10-22 09:00:00 | Verizon Communications Inc. | 415,798 | Hans Vestberg: I'm going to take some help from Joe later on, but I'm going to start myself first. The BEAD program is, of course, contemplated in everything we have here. In the Fios footprint, it's obvious we will go for it when it makes sense for us, both from a return on investment. And so we -- in our Fios footprint, there's going to be great opportunities for us for sure, and we will be active on it. On the second one, when it comes to fiber or Fios versus fixed wireless access, I think -- I hope that you heard from Joe our strategy on fixed wireless access is a secondary business case on mobility. So we -- first of all, we deploy our C-Band for mobility. And the agreement that Joe and I have in the whole team is that we build mobility for two reasons: revenue generation as well as customer satisfaction. And then we get a secondary fixed wireless access opportunity. So it's not really thinking about where we do Fios or we do fixed wireless access. We do Fios and we do mobility. Then we create opportunities. And -- and I always love what we are doing because we give optionality for our customers. There are customers that just kills to get Fios. But there's others that really feel that fixed wireless access is a solution they want to have because of simplicity. So we're going to create optionality. And you saw the consumer slide that Sampath showed with customer offering framework, I think it's called, where actually everything is in the same model, regardless of what it takes. So that's how we think about it. Do you want to add something? Yes, you want to add something. Please come up here. |
7,707 | VZ | 3 | 2,024 | 2024-10-22 09:00:00 | Verizon Communications Inc. | 415,798 | Joe Russo: Okay. Yeah. Just on BEAD. So we've built a very good process for managing subsidies. And we've been already receiving and winning subsidies in our Fios footprint. So as BEAD starts to get deployed, we'll deploy those same kind of standards and processes to participate. When I think about the 35 million to 40 million, it will be a very, very small percent that we think is BEAD. And we foresee that getting 35 million to 40 million will be with or without BEAD funding.
Hans Vestberg: Thank you. Next?
Brady Connor: Okay, we're going to work our way up. I'm going to go a second row. We'll go Hodulik on the end over here.
John Hodulik: Thank you. I don't think you would see me behind these tall guys. First, starting with fixed wireless. Thank you guys on the new targets. Just on the quick math, it seems like the cadence is slowing a bit. You guys are doing like 360 -- 360,000 a quarter. It looks like that slows to just sort of doing it ratably to under 300,000. I just want to make sure if that's sort of what we should expect to see or if there's something different in the numbers? And then these new initiatives are great. You guys did 1.7% service revenue growth this quarter. Obviously, you don't want to give 2025 guidance -- full guidance here, but should we expect an acceleration in service revenue growth from these new issues? |
7,708 | VZ | 3 | 2,024 | 2024-10-22 09:00:00 | Verizon Communications Inc. | 415,798 | Hans Vestberg: On the future guidance, I'm going to leave that to Tony. On the first question, I'm going to start. I think to some extent, you're right. So think about this, we have had a target to create and get between 350,000 to 400,000 new broadband subscribers every quarter. And I think we've had that, but I'm not sure how many quarters. Sometimes up to 400, sometimes a little bit north of 350. What is happening right now is two things. First of all, the fixed wireless access is going into in a second sort of transformation because the C-Band is not going to suburban and rural. And of course, the opportunity is equally big, but the density is way less. So, we're going to see for a while that OFS, it's going to be a little bit less. And the second one is, as we're ramping up the Fios. You saw that we are doing some 450 to 500, going to 650 is a ramp-up. So, in the short-term, I think you're going to be in the lower end of that 350. And then I think when you see the ramping up of both of them, you're going to see a little bit different. So, I wouldn't say that we have changed anything on the pace. It's just a technicality of how we build right now and how we're ramping up Fios and actually going suburban to rural with our C-Band. So, those are the things. Tony, do you want to talk about guidance 2025 now?
Tony Skiadas: Sure.
Hans Vestberg: Great. I'm eager to hear. |
7,709 | VZ | 3 | 2,024 | 2024-10-22 09:00:00 | Verizon Communications Inc. | 415,798 | Tony Skiadas: Sure.
Hans Vestberg: Great. I'm eager to hear.
Tony Skiadas: Hey John, thanks for the question. So, look, as we said we said this morning, we're on track with our service revenue, and we said we'd be at or above the midpoint on service revenue. If we think about next year, I'm not going to guide on 2025 right now. But in terms of puts and takes, we've taken a lot of actions to position ourselves for sustained growth. So, that includes the P&Q that you heard from Sampath, so volume improvements in pricing, and it also includes fixed wireless access, and you see the great growth that we've seen on fixed wireless access. Prepaid, has now, Sampath mentioned, turned positive. So, that's been a headwind this year. We would expect that to start to turn next year. We're still facing headwinds with program amortization. So, those are the puts and takes as we head into next year, and we'll bring it back to you in January.
John Hodulik: Right. Thanks guys.
Hans Vestberg: Next.
Brady Connor: We're working our way up to the front row. We're going to go -- we'll go Barden here on the end, the first tall person.
Dave Barden: You don’t have to sound so excited about that Brady. Dave Barden from Bank of America. Thanks Hans. So, if my base case is that the tax regime remains the same. Cash tax is going up. CapEx is going up. Working capital, if the iPhone becomes a bigger thing, it's not going down, it might go up.
Hans Vestberg: A lot of assumptions here, continue. |
7,710 | VZ | 3 | 2,024 | 2024-10-22 09:00:00 | Verizon Communications Inc. | 415,798 | Hans Vestberg: A lot of assumptions here, continue.
Dave Barden: Those are -- not so much assumptions. And then you're going to do the Frontier deal and they're not free cash flow positive. So, is the message financially to you and Tony that 2024 is the high watermark for free cash flow at Verizon because it doesn't seem like there's a lot of dials to turn to kind of make it get a lot better. And the second question, if I could, would be there's some agitators at Frontier that want you guys to pay a higher price, bid against yourselves in that process. And you spoke a lot about how important it is to have this 100 million homes passed and the Verizon version of convergence. What are you willing to do to get that deal done?
Hans Vestberg: Okay, I'll leave the capital allocation for you, but I think that, of course, you can always find headwinds. We have a lot of -- or tailwinds as well in cash flow, and we will be very focused on that. So, I will let Tony go through the puts and takes on that. On the Frontier deal, I mean, first of all, if you have read the proxy, which you probably have done, it was a competitive process. We were asked for a best and final. We gave the best and final. We have a signed agreement and a contract for a merger. Now it is up to Frontier's shareholders to make the vote. We always have different type of strategies. We will continue to have that. This fitting in well right now. We're going to see what's going to happen, but we feel really confident that this is fair and good for all stakeholders. Tony? |
7,711 | VZ | 3 | 2,024 | 2024-10-22 09:00:00 | Verizon Communications Inc. | 415,798 | Tony Skiadas: Hey Dave, so we're not going to guide on free cash flow, but a few things. I mean, the same puts and takes that we shared at the beginning of the year still remain intact. So, see the EBITDA growth, and that's the focus for next year. Interest, in terms of deleveraging, we'll have to see where rates go. That will have an impact. And then cash taxes, as you mentioned, they're up this year. We'll have to see what happens on the legislative front. They're going to be up -- we said $2.5 billion so far this year. We'll see where that goes. And working capital, we're not seeing a big upgrade cycle right now. The upgrades were down 10%. Right now, customers are choosing to hang on to their phones a lot longer, and that's by choice. The average upgrade rate, and Sampath can correct me, but it's probably 40 months or so. So that hasn't changed. So we're going to continue to stay disciplined and segmented in our approach and then we'll come back on our thoughts on cash flow back in January. Thanks.
Brady Connor: I'm going front row over here to Peter next.
Peter Supino: Hi thanks, Brady. Thanks, Hans. Peter Supino with Wolfe Research. A question on fiber. And really about the rate of expansion, your target plus a lot of other publicly available targets and the guestimate about how many private fiber passings there are in the country summed over 100 million homes. Population density observations, nobody has perfect information, lead us to think that maybe you should be in a hurry to build as many homes as you can. And yet your current velocity of expansion is still much slower than other -- a couple of other companies. Wondering, how you think about the speed at which you want to pursue the targets that you laid out here today? Thanks. |
7,712 | VZ | 3 | 2,024 | 2024-10-22 09:00:00 | Verizon Communications Inc. | 415,798 | Hans Vestberg: Thank you. I think about broadband, that's the thinking I have, and team has that as well. That means that we include both our Fios, as well as the fixed wireless access as broadband solutions. And as you have seen lately, they are doing well, both of them. And that's how we think about our customers, and we create optionality. So, I that nobody else is building on the pace that we are doing in the combination of it. That's how are we thinking. And remember, we build the network once. And then at the edge of network, we decide what type of connections we have. Sometimes it's Fios, sometimes it's 4G, sometimes its 5G, something is fixed wireless access, and then we get the best return on investment on the invested capital because we do it one. So that's the thinking we have, and that's how we serve our customers. So I feel good about the pace we have and how we're deploying this again with the financial mind in behind it to see that we get the best return on investment for our shareholders. Anybody want to add something to that? Okay, then you don't need to. Next?
Brady Connor: Come back in the middle of the room here, we'll do Jim and then Sebastiano.
Jim Schneider: Thanks. Jim Schneider from Goldman Sachs. Just a couple of quick questions on the network side, if I could. First is on -- just in terms of the longer term, the fixed wireless targets, do those sort include or not include any dedicated spending purely for fixed wireless? I know you said it's mobility-led, but does it of that? And talk about the part of that, which is small sales, if any? And then maybe tactically for 2025, can you maybe talk about the drivers of the CapEx increase. How much of that increase is coming on the wireless side on macro cells? How much of that is coming from fiber, et cetera? Thank you. |
7,713 | VZ | 3 | 2,024 | 2024-10-22 09:00:00 | Verizon Communications Inc. | 415,798 | Hans Vestberg: On the first question is no, there's no success-based fixed wireless access in the plan that we're presenting today. That's an optionality we have for the future. Right now, again, believe in our design principles because that makes the operation easier. It makes it easier for our customer, it makes it better for capital. That doesn't exclude it in the future that we will have success-based fixed wireless access. And then of course, I'm sure that Joe is building more capacity. So Kyle and Sampath has an opportunity to leverage on that. But in this plan, it's mobility first in all our C-Band. The second question is about the increase or the BAU level you have right now, how much is macro? You heard about what we said. We were trying to go to 80%, 90% of our planned radius having C-Band. And then you see the Fios up to 650. I think those are two important ones. There are other things coming down to some extent in our normal build because we have sort of come pretty far on the 4G, and we see much more traffic on the 5G. We have gone very far on our small cell with millimeter wave that is capturing a lot of our traffic in dense areas. That's a little bit smaller today. That doesn't mean we don't believe in it. We think it's super important. So I think those are the puts and takes in the CapEx. Joe?
Joe Russo: I'll just add on small cells, and I mentioned it during, but we started probably about six months ago now deploying C-Band on small cells and have seen really good success with putting that technology on our vast small cell network, giving us more coverage and certainly more capacity for both mobile and fixed wireless access. So my view is that will continue in this four-year build program. As we'll leverage what we've done both with our millimeter wave small cells, and we had a pretty significant small cell network even for the 4G network. Leveraging now C-Band on those has really proven to be a great tool to add coverage and capacity. |
7,714 | VZ | 3 | 2,024 | 2024-10-22 09:00:00 | Verizon Communications Inc. | 415,798 | Hans Vestberg: And one other thing that is increasing, which you mentioned was, of course, the MDU solution we have now for fixed wireless access, using millimeter wave. We have talked about it. We're going to put that in commercial use in next year. So that's, of course, also an opportunity, but of course, with a great return on investment.
Brady Connor: Sebastiano, and then we'll go up here front row to Greg.
Sebastiano Petti: Hi. Sebastiano Petti, JPMorgan. I guess just following up on Jim and kind of Dave's question as well, but help us think about the shape of CapEx over the next several years because the 17.5 billion on a stand-alone basis, I guess, 17.5 billion to 18.5 billion includes the MDUs, the ultra wideband build as well as the 650...
Hans Vestberg: It's a range between 17.5 and 18.5.
Sebastiano Petti: Yes. Yes. So within that range, is there any maybe perhaps milestones or things like that, that are more elevated next year that that begin to peel off like the MDU or the ultra wideband build, should we think about it as being more steady state over the next several years? |
7,715 | VZ | 3 | 2,024 | 2024-10-22 09:00:00 | Verizon Communications Inc. | 415,798 | Hans Vestberg: As I said, I think that this is a BAU level that we have in a steady state. I'm not going to guide for future years. I always said that if we see an opportunity where we can grow faster and we can invest more in CapEx, we will explain that if we go outside the normal BAU levels. Right now, we don't see that. Remember, we have talked about, there's no auctions for spectrum coming out at the moment. Usually, that is triggering or new. We don't even think 6G is in any of the plan of records we have right now. So it's a lot of things that usually catapult the higher investment level. We don't see them right now. So BAUs this level we are right now 17, 17.5 up to 18.5, that's where we're going to spend it. But ultimately, if we see opportunities, remember the capital allocation priorities, we spend it in business, but we also want to explain that is something additionally we can get and that we can share with our shareholders. But right now, the BAU levels are what you see from us right now. The big triggering events that you sometimes have, it's going to going to come 5G, its go spectrum auction. I don't have visibility of anything on that at the moment.
Sebastiano Petti: Okay. Thank you. And then maybe one for Sampath. I mean what underlies the confidence as we think about the 80/20 service revenue growth and the sustainability of, I guess, the volume side of the equation as you think about maybe tougher comps on the gross add side, the EIP dynamics and help us maybe think about the levers of sustained consumer volumes? |
7,716 | VZ | 3 | 2,024 | 2024-10-22 09:00:00 | Verizon Communications Inc. | 415,798 | Sowmyanarayan Sampath: Yeah. Look, I think it comes back -- we've had seven quarters of strong gross add year-on-year growth coming into this. And all the efforts that we've put in, whether it's local marketing, going back to market structure, sales incentive, myPlan, just better execution on the ground, we continue to see gross add improvement in our business going forward. So I think that's a machine that we've gotten back to the right phase, and you're to see continued growth in that. The second comes down to churn. As I mentioned, there's nothing structurally that prevents us from getting back to leadership position on customer retention and churn. We made some short-term strategic trade-offs, which are the right things to do. But over a period of time, churn will start coming down, mobile plus home offerings, converged offerings is probably the biggest lever that we have there. But then myPlan, some of our loyalty programs and then just better execution on the churn piece as well. So you're going to see both things coming in, continued progression on gross add momentum and then better churn. When you put both of them together, that's how we're going to sustain a net add growth over period of time to do that. The second is on the price side. Look, we've had four or five price increases depending on how you count it over the last years. And in every case, the churn has been less than what we thought coming in. So customers like our product, they our offering, and you're going to see continued ways in which we can earn the trust of customer. The last one is there is another type of price increase, which has earned price increase. If you look at the chart where I had the customer offering framework, we are able to upsell our customers, upsell them on the type of plans, but also upsell them on perks and other things. We have seven million perks in our business right now. That's going to double this time next year. So you're going to see a lot of momentum on the price side just by our ability to earn those |
7,717 | VZ | 3 | 2,024 | 2024-10-22 09:00:00 | Verizon Communications Inc. | 415,798 | to double this time next year. So you're going to see a lot of momentum on the price side just by our ability to earn those price-ups that we have. So a combination of gross adds, better churn and also ability to upsell our customer both on connectivity and some of the other offerings that we have. When you put all of that in, I get really comfortable about the LG20 [ph] framework that we laid out, that we are going on the right path to get there. |
7,718 | VZ | 3 | 2,024 | 2024-10-22 09:00:00 | Verizon Communications Inc. | 415,798 | Sebastiano Petti: Good. Thank you.
Brady Connor: Yeah, we're going to go Greg [ph] in the front row over here, and then we'll start mixing around.
Unidentified Analyst: Sure. Thanks. Another CapEx question, but more situated on the B2B opportunity. One of your peers has been putting out a few press releases on GenAI fiber. And you have a lot of fiber, both in footprint and from the One Fiber build and Jaunt XR acquisition. So I'm just curious on your latest thinking on the economics and the opportunities there.
Hans Vestberg: Thank you. I think I'm going to ask Kyle to comment on that. If we talk about the GenAI opportunities, I talked about a three-pronged GenAI strategy we have. We have employee experience improvements right now already in the market when it comes to call agents, et cetera. We have our personalization for customers. And then we have our revenue opportunity. And as I alluded to, given the assets we have in our network, we see great opportunities for having a chance to earn business there, which we've already done. But maybe, Kyle, you can talk a little bit more about it. |
7,719 | VZ | 3 | 2,024 | 2024-10-22 09:00:00 | Verizon Communications Inc. | 415,798 | Kyle Malady: As you rightly bring up, the investments we've made before and say One Fiber and all the other fiber and all the CEOs and everything we've done, we're kind of reimagining those assets right now is how do we -- and how we can sell into this. And actually, right now, we're already selling into it. We're getting a lot of good orders from hyperscalers either on dark [ph] fiber or lit [ph] and we're going to see that growing. But we have more than that, not just the fiber, it's the power space and cooling, which you know is in really high demand. And we have a lot of latent assets in that area. So at the moment, we're putting it together. We're kind of -- I talked to somebody before, we're going to measure twice and cut once. We're not -- we're figuring out exactly how we're going to go into this market. It's a huge market. We can't cover it all, but there are certain segments we might be better off in than others, and that's -- we'll be back to you pretty soon talking to you about it. It's a great opportunity for us.
Unidentified Analyst: Got it. Thanks.
A – Brady Connor: Okay. We're going to go over here. We're going to go Brandon, and then Mike Rollins.
Q – Brandon Nispel: Thanks. Brandon Nispel with KeyBanc. I was hoping you could maybe unpack the fixed wireless targets in the homes passed from the perspective of maybe a proportion of MDUs versus single-family, Tier 1, Tier 2, Tier 3 markets and percentage of millimeter wave versus C-Band? |
7,720 | VZ | 3 | 2,024 | 2024-10-22 09:00:00 | Verizon Communications Inc. | 415,798 | A – Hans Vestberg: That's a lot of unpacking in that one. I'm not sure Joe you want to do it or something. But of course, we -- as I said before, the C-Band deployment goes to suburban and ruling because we started in the urban areas because that's where we got the spectrum first. That's another opportunity. It's a great opportunity, but less density. So I think that's one thing that's happening. The MDU is just adding to coming back to some of the places with dense areas where we can do the MDU solution. So I think it's a combination of them all. I'm not sure it's a special distribution or something if somebody wants to -- we just deploy our technology from a mobility point of view, and then get all the opportunities around it. Again, there's no success based sort of CapEx here for fixed wireless access, which comes along with everything else we're doing. But again, it's a great investment. Mobility is performing better when we have C-Band, both from churn and from step-ups and then we will fixed wireless access. So it makes all the sense for us to deploy it in the right way where we find the revenue, and that's what Joe is doing. Anything else you want to add? Are you sure. Okay. I understand the question, but this is sort of -- we have the framework and our plan of record, how we're deploying this, and it comes along with that. And then both Kyle and Sampath are selling into those open for sale that is coming out from either MDUs or from the C-Band deployment. |
7,721 | VZ | 3 | 2,024 | 2024-10-22 09:00:00 | Verizon Communications Inc. | 415,798 | Q – Mike Rollins: Thanks. Mike Rollins from Citi. I wanted to follow up on this question, but maybe in a different way. So the mobility first is going to take ultra-wideband to 80% to 90% of population and presumably households by end of next year and maybe 90-plus percent over time, but the FWA target is roughly like 60% of homes. What holds that percentage back relative to the 90% plus? And what would be the catalyst to try to unlock that additional 30 points of penetration? And then just a second question, if I could. When you look at building fiber and the team mentioned some of the progress in building and dynamics, what's the base case for penetration and ARPUs from the fiber builds, let's say, over a five-year period?
A – Hans Vestberg: On the first one, I assume my team always want to beat the targets. We give you one target, the team is working to really beat and do it better and faster. You saw what we did last time, we said 4 million to 5 million. We beat that target with 15 months. So I think the team and are building ahead. So, but right now that's a target. It's always a time lag from when you deploy the technology and when you get the revenue and the subscribers. So I guess those are two questions. On the second question, Sampath, I think you can answer on that. You can answer on the first one if you want to correct me.
A – Sowmyanarayan Sampath: No, I will not do that today.
A – Hans Vestberg: Okay. Thank you. |
7,722 | VZ | 3 | 2,024 | 2024-10-22 09:00:00 | Verizon Communications Inc. | 415,798 | A – Sowmyanarayan Sampath: No, I will not do that today.
A – Hans Vestberg: Okay. Thank you.
A – Sowmyanarayan Sampath: Look, on the second, the way you think about first is penetration. Just have been in this business for 20 years. We'll see penetration well north of 40% in our space as we do that space. I think now get more comfort because we'll have more mobility to bear into that space as well. So well north of 40% penetration, we do that. But the second thing we are seeing is every new cohort that we bring in to the market tends to have better one-year penetration than the previous cohort. So it gives us more confidence that -- and you would think when we get to the end of our build, you're getting to the less attractive, but that's not the case. Our first year penetration is actually better this year than it was last year and other. Some has to do with the way we market and the way Joe and my team work together to pre-sell some of that capacity to do that. In terms of ARPU, I know we don't report a specific broadband ARPU number. But look, we tend to do very well. We are industry-leading. If you look at Frontier's ARPU numbers, we'll have continuous growth on top of that because we will -- our customers on broadband sit in the myHome framework, where they come, they buy the connectivity piece. And look, majority of our customers take the 1 gig plus plan coming in. So that gives us a boost in ARPU. And then we start selling perks and other adjacent services on top of that. So we'll see good comfortable ARPU growth with a 1 gig plus plan, ARPU growth on that and the north of 40% penetration pretty much across our fiber footprint as well. Thank you. Next.
Brady Connor: Okay. Let's go. We're going to go Frank back here in the back row, and then we'll come back up to Tim in the front row over here. |
7,723 | VZ | 3 | 2,024 | 2024-10-22 09:00:00 | Verizon Communications Inc. | 415,798 | Frank Louthan: Okay. Great. Frank Louthan with Raymond James. So on the fixed wireless, what is sort of the outlook for that on the business side? Is -- are those 8, 9 -- 8 million, 10 million subs include business, Type 2 replacement, you comment on that? And then getting to 35 million or so homes passed with wireless, is a pretty high percentage. Can you get there without additional M&A? Or does that include BEAD or other government subsidy?
Hans Vestberg: The second one doesn't include any M&A. And besides the one we have planned that you have announced. And B, as Joe said, there's no -- there's small pieces that will not rock the boat. We will make our numbers, regardless or BEAD or not. We will, of course, participate in BEAD that we can do. On the business side, those are in the number 8 to 9, yes, business side is included. And I have to say one of the things that Kyle and I are more surprised than others is, of course, the success we have had on the business side. Maybe you should talk about it on fixed wireless access on the business side, Kyle.
Kyle Malady: Listen, Frank, thanks for question. We continue to see this as a great opportunity, like I said before. We actually did a little bit better with this product than we thought we might. And what's interesting is enterprises, small businesses are figuring out different ways to use this connectivity. It's just not for broadband like you would see in a consumer world. So we think people are going to continue to innovate with it. And so this new -- these new open for sales that Joe and his team are putting together for us, we feel we can accelerate and really sell into this thing. I'm also excited about the -- what you hear about the using millimeter wave for MDU. A lot of these MDUs also have stores or businesses in them. And so we'll be able to leverage that investment as well to increase our market share in this area. So a lot of work to do, but – but we're really happy with the plans that Joe has put out for us to sell into. |
7,724 | VZ | 3 | 2,024 | 2024-10-22 09:00:00 | Verizon Communications Inc. | 415,798 | Hans Vestberg: And a good thing from a sort of a utility point of view, many of the customers that Kyle have, they are using the fixed wireless access on certain hours. The consumers are another hour. So this is just using the utility even better that we can sell it in and we can monetize all hours of the day with our network. Next.
Brady Connor: Come up here to Tim in the front row.
Tim Horan: Thank you. Tim Horan, Oppenheimer. We're seeing pretty unprecedented improvements in technology across the board, satellite, AI, what you're talking about, you would stand alone. Can these be material drivers to the business model, both maybe just talk a little bit about incremental revenue from all of these and maybe the ability to use AI to automate and digitize a lot more. And I guess -- and specifically, you satellite direct to phone, direct to mobile. Can that be a real needle mover in terms of overall growth rates for the company? |
7,725 | VZ | 3 | 2,024 | 2024-10-22 09:00:00 | Verizon Communications Inc. | 415,798 | Hans Vestberg: I think AI is definitely over a time frame. So how kind and I think about AI, generative AI especially, in the beginning right now, we see large language modules going to the big data centers out to the market all the time. As soon as they're going to be an application that you're going to use as an enterprise, you're going to put it much closer. For the main reason of the transport cost for privacy, for security and in some cases, also latency, maybe not equally much. But then you're going to see a big opportunity for us, given what Kyle talked about. And we will come back a little bit more specific on it, but definitely. But it's going to take some time from all these large language models to be real products and sitting in the edge of the network. So that's clear. Slicing is another area we talked about. We believe that we will probably start more in the business side and then we'll come to the consumer side and that we see as an opportunity as well. On the satellite, a little bit too early to see how large opportunity can be, I have to say, because, of course, we want to offer satellite to our customers in the white spaces, we are not allowed to build, for example, and see a direct device. A little bit too early on the consumer side to see if that's a business case. On the business side, yes, we can see that already for remote enterprise or things like that. So those three are new revenue opportunities on top of everything we've talked about in.
Brady Connor: Okay. We're doing fine on time. So we're going to get to everybody to just be patient. So we're going to go front row with Walt very here. |
7,726 | VZ | 3 | 2,024 | 2024-10-22 09:00:00 | Verizon Communications Inc. | 415,798 | Walt Piecyk: Walt Piecyk from LightShed. So the 2% to 3.5% growth you had historically, there was a lot of doubts whether Sampath is going to deliver on the units. Obviously, it's going to come down in the fourth quarter, but it looks like the Q of the P&Q is happening, just had a price increase, which should accelerate the postpaid growth in the fourth quarter at a time when people are concerned about the economy, right? So you've got -- it seems like some decent strength there. Now you're investing in fiber, you're investing in fixed wireless. Who knows where inflation is, but is the Board now expecting you to deliver higher than this 3% growth? Again, you've got postpaid working. Now you're talking about prepaid, growing, you're making new investments. Shouldn't the expectation be that total wireless number, not 2025 guide, Tony, but like at some point, getting to a -- what is considered -- I mean, T-Mobile is considered a growth company, what are they doing, like 4%, 5% growth, like so delivering that type of growth? That's my first question. |
7,727 | VZ | 3 | 2,024 | 2024-10-22 09:00:00 | Verizon Communications Inc. | 415,798 | Hans Vestberg: It was a good question, Walter. There was a lot of things to unpack there. But ultimately, you're right on many things we're doing. You're right. We're trying to turn everything right, but we also had some headwinds that with program amortization, for example, that is a headwind for us. So but all in all, our focus is to really do right and do more value for our customers. And I think we are have proven now the last six, seven quarters that we talked about that we can do it. Not going to go into confirming any of your growth numbers or percentages, but we are incentivized to grow our wireless service revenue, that's part of all the teams sitting there and all the V Teamers, they are incentivized to do that.. So of course, our focus is going to be that because we have a leverage model. If we grow, it basically falls down even more to the bottom line, and then we can both improve our cash flow and/or adjusted EBITDA. So all the things you are saying is what we are doing on. I'm not going to commit to any numbers. But clearly, that is to grow faster over time or be sustainable. That's very important for us because that is how we return both cash flow to our shareholders and continue to be an attractive stock to invest in.
Walt Piecyk: Okay. And then just one quick one because you know I like care about the Apple stuff. I think Tony was very clear on where the current upgrade rates are. But the new narrative is, oh, even though AI sucks now, it's going to be better over the next couple of years. Just kind of your viewpoint on -- because you have to manage cash, right, based on upgrades over the next two years, do you think AI is something that is going to stimulate the upgrade rates within the wireless whether it's Verizon or just broadly in the industry? Thanks. |
7,728 | VZ | 3 | 2,024 | 2024-10-22 09:00:00 | Verizon Communications Inc. | 415,798 | A – Hans Vestberg: It's a little bit too early to say. I mean many of the AI application, of course, are very helpful. But when it comes to consumer devices, we also need to think about the processing power for this application, if you want to do something really innovative. So I think it's a bit too early to call that. I usually say, historically, when we've seen sort of cycles in our industry that's been 4G to 5G or hardware redesign. Those are the things that have triggered it. Now we're talking about is a software cycle's going to do it. It's too early for us to say at least, we're so far, and I'm looking at my colleagues, we haven't seen that. We haven't seen that is creating the cycle. But it's too early to say we're going to be -- if it's going to happen, we're going to be continued very discipline in how we do promotions. We're going to have the right promotions for the right customers at the right moment in the right segment with the right type of value. So we will continue the work we started somewhere in 2023 with segmenting approach on everything we're doing. Remember, I look at this as a customer sort of investment that we have, all the way from promotions, retention and media. For me that's one bucket, how I drive the market. And that's a tight budget for us, but it's very flexible. As I see Leslie is here in marketing. Sampath is here, Kyle is here. We sit down all the time and see should we put more retention, should we do more on promotion, should we do more on media. That is an ongoing work for us that is dynamic nowadays. Historically has been a little bit more static. But where the market is right now, this is super important to be good at this. And then AI comes in, so you can be even better to see that -- we have -- our customer segment here needs more offerings here. We need to come from here, need more media. We need more retention. All that is a new word where we are in a world where wireless and broadband is such a necessity. Everybody needs to have it. If you're a business or if you're |
7,729 | VZ | 3 | 2,024 | 2024-10-22 09:00:00 | Verizon Communications Inc. | 415,798 | are in a world where wireless and broadband is such a necessity. Everybody needs to have it. If you're a business or if you're an individual consumer, and we have the best products in both of them. We just need to see that we are creating the value for our customers, and we can go with them upwards. This is something we spent enormous lot of time on because we are getting into a new phase all our industry where I think that I don't think we have ever been as good position as well right now. |
7,730 | VZ | 3 | 2,024 | 2024-10-22 09:00:00 | Verizon Communications Inc. | 415,798 | A – Brady Connor: All right. We're going to go -- well, there's still hands up. Okay. We're going to cut in over here and then cook in, then we're going to come back to Laurent. And we'll finish with Jonathan and John.
Unidentified Analyst: So maybe, I guess, to start with on fixed wireless. I mean I don't know if this understanding is correct, but it feels like the approach or the go-to-market strategy is mutually exclusive between fiber and fixed wireless in the sense that I don't think that's the approach some of your peers are taking where fixed wireless is top of the funnel, you upgrade people to fiber and it becomes a different path. For you it seems like a TAM opportunity where you expand the market. So first, I want to get an understanding of whether that's the go-to-market approach?
A – Hans Vestberg: Yeah. We can confirm that one. Yeah, that is it. I mean we want to create optionality and that's how we build the networks. Different customers want fiber or Fios and others want fixed wireless access. We want to want to create that opportunity. I don't miss out on any of the segments because they like one product and the other. We are trying to address both of them. That's what the plan you see here.
Unidentified Analyst: And then from a capital allocation perspective, I mean, when you think about your peers, they're obviously using a slightly different approach when it comes to investing in fiber with JVs and maybe more localized kind of an approach in different parts of the country using these JVs. And you followed a more of an on-balance sheet approach. Is that an option you have in the future to look at some of these structures? Or is this something that that you've made a deliberate choice on this is--? |
7,731 | VZ | 3 | 2,024 | 2024-10-22 09:00:00 | Verizon Communications Inc. | 415,798 | Hans Vestberg: No, it's not a deliberate choice. It is -- we look into everything and it's an option, but again, it has to be a good return on investment. So far, we haven't found any third-party models where we don't own the capital and somebody else own the capital that is really attractive with our return on capital because we have one of the best into return on capital in the industry and we want to see that, that continues. So far, it has been organic. We're doing it. But -- nothing is excluded here. I mean, I usually say that the CEO, you can never say that are never going to do it and then suddenly you do it, then everybody say you told us not. But -- so I couldn't exclude it, but so far, we haven't found any of those models that we think is attractive in our capital allocation and our return to our shareholders.
Brady Connor: We'll go to [indiscernible] next.
Unidentified Analyst: Thanks. [indiscernible] with Evercore ISI. Maybe for Sampath, I had a question about your perks portfolio. And the 7 million subscriptions, you mentioned is pretty impressive, fairly ambitious targets to double that going forward. Are you happy with the portfolio now? Do you see that changing? And as you expand that, does your relationship wholesale partnerships, does that dynamic change in your economics evolve, especially with entertainment partners that you have? |
7,732 | VZ | 3 | 2,024 | 2024-10-22 09:00:00 | Verizon Communications Inc. | 415,798 | Sowmyanarayan Sampath: I think when we started launching myPlan, our sales teams were getting used to this. It was selling motion. Our customers are also getting used to it. So, if you look at our attach rate, it has grown significantly from when we launched at the beginning of the year, again, beginning of the year to where we are now, teams are getting more comfortable than that. So, that's why we get to 7 million. We'll double that at $10 a pop, you can do the math on where it goes. What we tend to find is the perks that do well for us are ones that are exclusive to us, ones that have maximum savings and then one just have a very strong value prop for the customer. So, you'll not see us have a very long tail on that. Because what it does is it doesn't focus the attention of the sales teams and our digital efforts to do that. So, we'll continue with our approach of having fewer, deeper relationships like right now, we have deep relations with Apple, with Disney, with Netflix, with MAX, some of our own perks as well. And also, it has to be margin accretive to us as well. We've been quite open about this. This is a margin play as much as it's a revenue play for us. So, fewer, more concentrated perks makes a lot more sense. And that if it kind of answers your second part of the question, we tend to have more leverage over our partners and that drives better economics for us in the process. But we're really excited about getting to double this perk portfolio with a pretty margin-rich pool that we have right now. |
7,733 | VZ | 3 | 2,024 | 2024-10-22 09:00:00 | Verizon Communications Inc. | 415,798 | Hans Vestberg: And then adding also Sampath some of the combinations, we are unique. We're the only one who can do those combinations that we have had, for example, MAX and Netflix in the market. Nobody can combine that. That's how we have negotiated, so we have this flexibility and exclusivity to do it, and that is what is driving quite a lot of things. And all-in-all, every perk we have is a saving for you, for our customer. And of course, it's also a saving for our partners because ultimately, they're wholesaling to us, they don't have the cost of acquisition. But again, we only do it when we -- it's accretive for us as well. Has to be accretive for the customer, has to be accretive to us. And then we go forward and creating a very unique model. And sometimes, you might think this is pretty simple. But I'm looking at Shankar, with this our head of IT. Just imagine you can come into the store and actually be a Netflix customer and move over to be a Netflix customer to Verizon. We take care of all of that back end. The only thing you need to remember is your password. And sometimes that might be a problem, I know. But so just imagine how much work we have done to make this a unique offering that is hard to replicate, first of all, some of them are exclusive. And number two, you need to replicate a lot of things behind because if you're going to go home and then you log off and then you log on and cancel and everything. I can tell you the heat rate is low. Extremely low. And that's why we have worked so much with the customer experience here to do this in the right way. And I think that Sampath and Leslie and Shankar and the whole team have thought about how we make it simple for our customers. So I think this is just the beginning of us using the distribution as a strategy. We have the network. We have the distribution. We're just going to continue to do the right thing for our customers here, and that's going to pay off long term for us. |
7,734 | VZ | 3 | 2,024 | 2024-10-22 09:00:00 | Verizon Communications Inc. | 415,798 | Brady Connor: All right. So the clock is ticking down. We have time for one more. We're going to go Laurent here in the back.
Laurent Yoon: Sorry, Sampath one more question for you. This is Laurent Yoon from Bernstein. You mentioned the 500 basis point incremental penetration of wireless and where you have fiber. Can you give us some color on correlation versus causation for that number? And secondly, how important is that observation or more explicitly. Is any of that the expectation of incremental wireless built into your fiber business case going to 35 million to 40 million passes? |
7,735 | VZ | 3 | 2,024 | 2024-10-22 09:00:00 | Verizon Communications Inc. | 415,798 | Sowmyanarayan Sampath: Yes. Let me answer the second part first. Look, we feel comfortable between Joe, Tony and I on this 35% to 40%. Fiber economics is getting better over time. Two reasons. The first one is cost, as Joe said, we're getting better on technology, better systems, able to take cost out of the process. Second is penetration. A, north of 40% penetration, but also how quickly we get to that north of 40%. That's another important factor. Another important factor, Laurent, is the first year of penetration. How quickly we get to first year penetration. And as I said, we keep getting better every year on how quickly we get to year one penetration in that. So those are some of the factors that make fiber really attractive. On top that, now you have mobile plus home benefits that historically, we've not had or not spent enough time on. So that's kind of cherry on top of the whole Sunday in terms of why fiber economics looks really strong going forward to do that. To answer your first part of the question, if we see 500 basis points or 5% better wireless market share in Tier 1 large Tier 1 markets where we have fiber. Look, I think there is, a lot of it is driven by causation, because you have better brand, we're able to spend more money on marketing in those local markets. Two is also distribution. Historically, we've not had our stores get involved in Fios sale. Now we have a sales motion where all stores, especially in the Northeast, get more involved in the Fios sale. You saw that this quarter, we actually launched it this quarter when we do that. So better marketing, we're able to double down efforts but also you tend to get the cross-sell opportunity in that. So I think a lot of it is causation going forward. So there will be upside in our mobility case as we continue to get to 35 million to 40 million homes of fiber definitely. |
7,736 | VZ | 3 | 2,024 | 2024-10-22 09:00:00 | Verizon Communications Inc. | 415,798 | Hans Vestberg: Thank you. I guess we are wrapping up. First of all, thank you, everyone on the webcast, everyone coming here face-to-face in New York. Hopefully, you've got more insights, both to our third quarter, but also to our expanded broadband strategy, and for sure, we will back with more information as we have more quarters to come and other activities. So once again, thank you so much, guys, for coming. Thank you. |
7,737 | VZ | 2 | 2,024 | 2024-07-22 08:30:00 | Verizon Communications Inc. | 415,798 | Operator: Good morning and welcome to the Verizon Second Quarter 2024 Earnings Conference Call. At this time all participants have been placed in a listen-only mode, and the floor will be opened for questions following the presentation. [Operator Instructions] Today's conference is being recorded. If you have any objections, you may disconnect at this time. It is now my pleasure to turn the call over to your host, Mr. Brady Connor, Senior Vice President, Investor Relations.
Brady Connor : Thanks, Brad. Good morning, everyone, and welcome to our Second Quarter Earnings Conference Call. I'm Brady Connor, and I'm joined by our Chairman and Chief Executive Officer, Hans Vestberg, as well as our Chief Financial Officer, Tony Skiadas. Before we begin, I'd like to draw your attention to our Safe Harbor statement, which can be found on Slide 2 of the presentation. Information in this presentation contains statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. Discussions of factors that may affect future results is contained in Verizon's filings with the SEC, which are available on our Investor Relations website. This presentation contains certain non-GAAP financial measures. Reconciliation of these non-GAAP measures to the most directly comparable GAAP measures are included in the financial materials posted on our website. Earlier this morning we posted to our Invest Relations website a detailed review of our second quarter results. You'll find additional details in the earnings materials on our website. With that, I'll turn the call over to Hans. |
7,738 | VZ | 2 | 2,024 | 2024-07-22 08:30:00 | Verizon Communications Inc. | 415,798 | Hans Vestberg : Thank you, Brady. Good morning and welcome to Verizon's second quarter 2024 earnings call. This quarter marks the beginning of Verizon's next chapter. We have launched a comprehensive brand refresh that goes far beyond the new logo. This transformation embodies our commitment to bringing choice, value, and control to our customers' lives, reflecting our evolution and vision for the future of connectivity. We refreshed our brand as our strategy continues to deliver strong results. The three pillars of our performance, wireless service revenue growth, adjusted EBITDA, expansion and increased free cash flow remain solid, showing both sequential and year-over-year improvements. In the second quarter, we saw wireless service revenue climb 3.5% year-over-year, adjusted EBITDA rise by 2.8%, and free cash flow increased 3% compared to last year. Our improving operations and results build on our first quarter momentum, keep us on track to meet our 2024 financial guidance and are paving the way for a sustained growth. Our progress comes from innovation that deeply resonates with customers, including the most personalized offerings in the industry. These initiatives align perfectly with our core strategy to strengthen and grow customer relationships while delivering the best return on invested capital. We launched myPlan in 2023 and it delighted our customers. In just over a year, over 30% of our subscribers are using it. That is an incredible adoption rate and now we're bringing these features to Home Internet with myHome. We're building and expanding on our strengths and successes and you can expect that to continue. For businesses we launched Verizon Business Complete, the industry's only end-to-end smartphone management system. We cover everything from selecting the first phone to upgrades with 24-hour service and same-day equipment replacement. These initiatives, combined with our strong network performance and extensive distribution, are reinforcing our leadership position and driving our industry |
7,739 | VZ | 2 | 2,024 | 2024-07-22 08:30:00 | Verizon Communications Inc. | 415,798 | our strong network performance and extensive distribution, are reinforcing our leadership position and driving our industry forward. Turning to the second quarter. We had a strong operational performance across mobility, broadband and our network. Our overall execution in consumer mobility has been improving quarter-after-quarter since early last year and our momentum continues. Consumer postpaid phone gross adds are up 12% year-over-year, which is amazing. Total postpaid phone net adds of 148,000 is a big improvement year-over-year and sequentially, and we expect to have positive postpaid phone net adds in consumer for the year. Choice is at the core of our approach, and we're constantly working on new partnerships that give our customers more options and value. One example is our addition of YouTube Premium and Peacock subscriptions which makes us the only provider offering our customers savings on 10 of the top streaming services. These content partnerships give our customers compelling reasons to shop with us. We also had a very strong quarter for postpaid phone net adds in Verizon Business at 156,000. This is a sharp improvement from the first quarter and shows how important we are to small, mid-sized and large businesses. Our business customers continue to invest in mobility and we offer them the widest range of choices. In the consumer value market, we are applying the same customer-centric discipline and rigor as we do in the post-paid market and are seeing significant net add improvements excluding SafeLink. We recently relaunched Total by Verizon as Total Wireless and enhanced our offerings with price guarantees, upgrade credits and other features. In broadband, we're still taking share with 391,000 net adds in the second quarter. Fixed wireless access remains a key driver with higher net adds than in the first quarter. We continue to grow our broadband base ending the quarter with more than 11.5 million broadband subscribers. We're also continuing to add business from large customers like government |
7,740 | VZ | 2 | 2,024 | 2024-07-22 08:30:00 | Verizon Communications Inc. | 415,798 | with more than 11.5 million broadband subscribers. We're also continuing to add business from large customers like government agencies. We're very proud that we were awarded a new contract from the U.S. Department of the Navy to provide wireless devices and device management building on our previous work together. For first responders, Verizon frontline delivers mission-critical connectivity and advanced solution to more than 40,000 public safety agencies across the United States, serving them with everything from device and network management to digital transformation. Verizon is there when people need us most from protecting the front-lines to natural disaster response. In fact, recent FCC data show us that overall our network outperformed our peers in areas affected by the Hurricane Beryl. I could not be proud of that. It's one of the reasons we're so committed to the network superiority and we're continuing to expand C-Band in suburban and rural areas. Our initial C-Band markets outperform with better gross add growth, higher uptake of premium services, and lower churn. We now have nearly half of our network traffic running on ultra-wideband, up from 36% a year ago. That number will continue to grow as we expand C-band reach. We're also working to enhance our network coverage by partnering with AST SpaceMobile to provide satellite to device connectivity using the 850 megahertz spectrum. This will bring our network to unserved communities, as we target 100% coverage from coast to coast. Our portfolio of high performance spectrum, the capacity of our fiber and our ability to deploy and support mobile edge compute, make us as the backbone of the AI economy and the partner of choice for players in the space. We will power the best AI services for our customers. What set us apart with AI is our network's mobile edge computing capabilities and deep fiber footprint. By processing data closer to the source, we enable real-time AI application that requires security, ultra-low latency, and high bandwidth. This is |
7,741 | VZ | 2 | 2,024 | 2024-07-22 08:30:00 | Verizon Communications Inc. | 415,798 | closer to the source, we enable real-time AI application that requires security, ultra-low latency, and high bandwidth. This is where our network shines, opening up possibilities that simply weren't feasible before. We're already seeing the benefits of AI in our operations. For example, we use AI to route customer support calls to agents best-suited to help. We analyze more than 800 data points per call to save our customers time and spare them frustration. It takes the best network to power these applications and today RootMetrics awarded us an outright win for national overall wireless network performance. Verizon also won the most national, state, and metro awards, including outright wins for accessibility, data performance, and streaming video performance. This is a kind of superior network performance that our customers deserve and expect from us. I'm pleased with our first half-year performance on how well our team is executing our strategy. I always say there's more work to do and there always is. We are seeing improving postpaid phone net adds in consumer, performing extremely well in business and taking share in broadband. We are achieving growth in a disciplined, balanced way and have built great momentum heading into the second half of the year and into 2025. Now I would hand over the call to Tony for a deeper dive into our performance. |
7,742 | VZ | 2 | 2,024 | 2024-07-22 08:30:00 | Verizon Communications Inc. | 415,798 | Tony Skiadas : Thanks Hans and good morning. Our second quarter results reflected accelerated growth in wireless service revenue and adjusted EBITDA, as we continue to generate strong free cash flow. These results were driven by strong operational execution in both consumer and business, which led to sequential net add improvements in postpaid phones, fixed wireless access, and prepaid excluding SafeLink. Within consumer, postpaid phone gross adds were approximately 1.8 million in the second quarter, a 12% year-over-year increase. This marks the sixth consecutive quarter with year-over-year growth. Excluding our second number offering, consumer post-paid phone gross adds grew 5% year-over-year. Consumer post-paid phone churn was 0.79% in the second quarter, up slightly from the prior year period. This was in-line with our expectations as we recently implemented several price increases that are expected to generate well over $1 billion in annualized wireless service revenue. We believe the majority of the pricing churn is now behind us and we continue to expect full-year consumer postpaid phone churn to be flat or slightly better than last year. Consumer postpaid phone net losses were 8,000 for the second quarter, which marks a significant improvement both sequentially and year-over-year. For the full year, we expect to deliver positive consumer postpaid phone net adds without the contribution from our second number offering. Moving to prepaid, we continue to make progress with our core brands while navigating the conclusion of the ACP program. Overall prepaid net losses were 624,000, including 410,000 losses related to the ACP shutdown, the vast majority of which are in our SafeLink brand. Excluding SafeLink, prepaid net losses were 12,000, a substantial improvement compared to the prior year period. Visible and total wireless continue to expand and perform well, while our operational execution with Straight Talk continues to improve. We exited the quarter with good momentum and prepaid, setting the stage for a |
7,743 | VZ | 2 | 2,024 | 2024-07-22 08:30:00 | Verizon Communications Inc. | 415,798 | with Straight Talk continues to improve. We exited the quarter with good momentum and prepaid, setting the stage for a stronger performance in the second half of 2024 and positioning us well for 2025. On the business side, postpaid phone net adds were 156,000 in the second quarter, the best performance in the last six quarters. We saw a strong sequential improvement of phone net adds across small and medium businesses, as well as enterprise and public sector customers. Turning to broadband, our total broadband net additions were 391,000 for the quarter, representing the eighth consecutive quarter with over 375,000 broadband net adds. In fixed wireless access, we continue to focus on building a long-term sustainable business. Total fixed wireless net adds were 378,000 in the quarter, up sequentially. This brings our base above 3.8 million subscribers, up nearly 69% year-over-year. Consumer fixed wireless net adds were 218,000, a 15,000 sequential increase as we continue to see healthy demand for reliable broadband even in a seasonally softer quarter. Verizon business continued strong execution with 160,000 fixed wireless access net adds, a quarterly record. Demand for the service is strengthening as small businesses and enterprises continue to trust the reliability of the product and speed and ease of deployment. Overall, Fios Internet net adds totaled 28,000 for the quarter. We are pleased with the continuous growth of Fios, even with the effects of the ACP shutdown and lower move activity. We ended the quarter with over 11.5 million broadband subscribers, a 17% increase from a year ago. Our broadband growth continues to significantly outpace that of the broader market, given our superior network experience and strong execution. Moving to the financials, we delivered another solid quarter and remain on track to meet our full year financial guidance. Consolidated revenue for the second quarter totaled $32.8 billion, a 0.6% increase year-over-year. That growth was driven by service and other revenue which grew |
7,744 | VZ | 2 | 2,024 | 2024-07-22 08:30:00 | Verizon Communications Inc. | 415,798 | quarter totaled $32.8 billion, a 0.6% increase year-over-year. That growth was driven by service and other revenue which grew 1.8% year-over-year, partially offset by declines in wireless equipment revenue, as total upgrades were down nearly 13% year-over-year. Wireless service revenue totaled $19.8 billion, a sequential increase of more than $250 million, and year-over-year growth of 3.5% or $660 million. The increase was primarily driven by consumer wireless service revenue, which grew 3.7% year-over-year to $16.3 billion. Consumer postpaid ARPA grew 5% year-over-year, reflecting the benefits of pricing actions and fixed wireless growth. In addition, myPlan helps to drive ARPA growth through premium mix adoption and [Perk] (ph) revenue. As Hans said, we now have over 30% of our consumer phone lines on myPlan and expect this to expand meaningfully going forward. FWA revenue which is included in wireless service revenue was $514 million for the quarter, up more than $200 million versus the prior year period. Launched at scale in 2021, our FWA business is expected to generate more than $2 billion in revenue this year with prospects for continued healthy growth. Prepaid revenue for the quarter declined $162 million versus the prior year period. The headwind to wireless service revenue growth from the ACP shutdown was approximately 30 basis points within the range we provided last quarter, and the margin impact was insignificant. With the majority of ACP disconnects now behind us and the momentum growing in our core prepaid brand, we are better positioned for the remainder of the year and heading into 2025. Consolidated adjusted EBITDA for the second quarter totaled $12.3 billion an increase of 2.8% year-over-year. The improved operating leverage reflects the lower upgrade activity and our disciplined approach to growth. We are making progress in our ongoing cost efficiency program and recently introduced new measures to improve our operating efficiency, including a voluntary separation program announced in June. |
7,745 | VZ | 2 | 2,024 | 2024-07-22 08:30:00 | Verizon Communications Inc. | 415,798 | introduced new measures to improve our operating efficiency, including a voluntary separation program announced in June. Adjusted EPS in the quarter was $1.15, down 5% compared to the prior year period. Growth in adjusted EBITDA was offset by below-the-line items, including higher interest expense, predominantly due to lower capitalized interest as we put more C-band spectrum into service. Cash flow from operating activities totaled $16.6 billion for the first half of the year compared to $18 billion in the prior year period. The results reflect higher cash taxes of approximately $1.7 billion, predominantly due to the unwind of bonus depreciation, as well as higher interest expense primarily driven by the decrease in capitalized interest. Capital spending for the first half of the year totaled $8.1 billion. This was $2 billion less than the same period last year as we have returned to historical levels of capital intensity. The network build remains ahead of schedule with C-band deployed on nearly 60% of our planned sites. Our full year guidance for CapEx spending remains unchanged at a range of $17 billion to $17.5 billion. The net result of cash flow from operations and capital spending is free cash flow of $8.5 billion for the first half of 2024. This represents an increase of nearly 7% or approximately $550 million from the prior year period, despite higher cash taxes and interest expense. We expect to generate strong cash flow in the back half of the year that will support paying down debt. Net unsecured debt at the end of the quarter was $122.8 billion, an improvement of $3.2 billion compared to the previous quarter and $3.7 billion lower year-over-year. Our net unsecured debt to a consolidated adjusted EBITDA ratio was 2.5 times, an improvement from 2.6 times last quarter. The strength of our results and momentum in our business put us in a great position to execute on our capital allocation priorities. In particular, we remain on track to further reduce the leverage on our balance sheet in the second |
7,746 | VZ | 2 | 2,024 | 2024-07-22 08:30:00 | Verizon Communications Inc. | 415,798 | allocation priorities. In particular, we remain on track to further reduce the leverage on our balance sheet in the second half of the year. In summary with 2024, reaching its midpoint, the team's strong execution and operating momentum is translating into results. We have good momentum in mobility as reflected by the strong gross add growth and continue to take share in broadband through fixed wireless access and Fios. Importantly, we are accomplishing this with a disciplined approach, balancing growth and profitability providing the confidence to deliver on our 2024 financial guidance. With that, I will turn it back to Hans for his final remarks before opening the call to your questions. |
7,747 | VZ | 2 | 2,024 | 2024-07-22 08:30:00 | Verizon Communications Inc. | 415,798 | Hans Vestberg: Thank you, Tony. Our focus for the second half of the year remains clear to drive growth in wireless service revenue, expand adjusted EBITDA and generate strong free cash flow. We are evolving our broadband strategy as we approach 4 million to 5 million fixed wireless access subscribers, and we'll continue to scale the business along with the private networks while driving mobility growth. Our ongoing C-band expansion will be crucial in supporting these efforts, enhancing our network performance and opening new opportunities across markets. Our commitment to a differentiated customer experience and operational excellence remains firm. The success of myPlan and our brand refresh are proof of our ability to meet evolving customer needs. We will build on these successes in the quarters ahead, as we work to deliver value to all of our stakeholders. We will continue to execute on our capital allocation priorities by investing in the business, supporting our dividend and paying down debt. As AI continues to reshape our industry, Verizon is well-positioned to enable and benefit from it. Our reliable, secure and powerful network will be at the forefront of AI and mobile edge compute applications. This is an exciting time for us at Verizon. Mobility, broadband and cloud, our essential services and their value has never been higher. We power and empower how people live, work and play. We are in a great business and there's so much more to come. We have the right assets and the strategy in place for success this year and beyond. I'm more excited than ever about what lies ahead of us. Now Brady, we are ready to take questions.
Brady Connor : Thanks Hans. Brad, we're ready for the first question.
Operator: Thank you. We will now begin the question-and-answer session. [Operator Instructions] The first question will come from John Hodulik of UBS. Your line is open, sir. |
7,748 | VZ | 2 | 2,024 | 2024-07-22 08:30:00 | Verizon Communications Inc. | 415,798 | John Hodulik: Great. Thank you and good morning, guys. Two questions, if I can. First, on ACP, was there any impact on the broadband side in the quarter? And do you expect any lingering impact from ACP, either in prepaid or postpaid or broadband, as we look out into the second half? And then second on upgrades, obviously another strong quarter with record, I think, record low upgrades. Given the AI phones coming out in the second, third quarter, how do you expect that to trend? And what do you expect the impact to be on the financials of the wireless business as we look out into the second half?
Hans Vestberg: Thanks, John. On the ACP, Tony will give you the details. But yes, we had some impact on the prepaid brand as was expected, and also a little bit on Fios. Looking forward I see this is a great opportunity. I mean 21 million people having ACP and the importance of mobility and broadband today is so important. And our offerings, but all the way from broadband with Verizon forward, fixed wireless access, both very efficient and then on the prepaid brands. So I see that as an opportunity going forward, but some slight impact on volumes this quarter. On the upgrades, as you have seen the upgrades has been a little bit low for a while. It is two things. First of all, the quality of the phones has continued to go up. But secondly, I think even more important is the discipline that we have shown over the years right now, I think for the last 1.5 years, how we do the promotions, how we look at the customer investment bucket and see that we are actually distributing our money. We are going to see what's going to happen in this cycle. I don't feel very worried about it. I feel that we are in a great position to handle it, and it's all in our guide what we are expecting. So I don't see any major things happening here. Tony? |
7,749 | VZ | 2 | 2,024 | 2024-07-22 08:30:00 | Verizon Communications Inc. | 415,798 | Tony Skiadas: Yeah, thanks. Good morning John. In terms of ACP updates, let me give you a couple of things here. So as we said previously, the majority of the ACP exposure is in our prepaid business. And as we said last time, we had about 1.1 million prepaid subs that benefited from the ACP program. In the quarter -- in the second quarter, we saw about 400,000 prepaid disconnects. This is the vast majority of what we expected. There is minimal impact on the postpaid side as I think was part of your question. We saw some pressure in Fios in terms of gross add opportunity. If we look ahead in the third quarter, we expect some disconnects in prepaid and a small number across other products. In terms of revenue, we also said that any impact that we would see we'd see on service revenue up to 50 basis points of headwind and we're tracking inside of that number right now. And even with the disconnects, the margin exposure from ACP was insignificant in the second quarter. So we will continue to keep everyone updated as we progress here.
John Hodulik: Perfect. Thanks, guys.
Brady Connor: Yeah, great. Thanks John. Brad we are ready for the next question.
Operator: The next question will come from Simon Flannery of Morgan Stanley. Your line is open sir.
Simon Flannery: Great. Thank you very much. On fixed wireless, you talked about the strong momentum. You obviously have a lot of C-band still to build out would expand your addressable market. I guess you're going to hit the $4 million, the low end of your guide probably in the August timeframe. So help us think about what's the potential beyond the $4 million to $5 million. And when you can give us more clarity on your opportunity there? I think you've talked before about plenty of excess capacity. And then there were media reports the other day about you looking potentially to monetize towers. Could you just talk about how you're thinking about tower sales or other real estate, other asset monetization? Thank you. |
7,750 | VZ | 2 | 2,024 | 2024-07-22 08:30:00 | Verizon Communications Inc. | 415,798 | Hans Vestberg: Thank you Simon. On fixed wireless access, you are rightfully say it. We have good momentum came into this quarter with 378,000 new net adds on fixed wireless access doing strong, both on consumer, as well as on a business. And we are now expanding our C-band to suburban and rural, which is another type of opportunity, less penetrated, but also more vastly distributed. So we are gearing for getting to our target between 4 million and 5 million fixed wireless access broadband customers. And as soon as we get there as I've said before, I will come back and see how we see the opportunity going forward. But clearly, we have a great network that can ingest more customers over time. But let me come back on the exact details of that when we reach the target. On the towers, I mean, or any rumor I wouldn't comment on any rumor. What you should know is that Tony and I are very committed to improve our cash flow, whatever we can see to see that we optimize our assets, we will do that but I have no comments or rumors in the market. But the focus on cash flow is extremely important because it goes straight into our capital priorities. That's why we've been so focused on for the last couple of years, and we did yet again in this quarter, good progress on them.
Simon Flannery: Thanks, Hans.
Brady Connor: Yeah, great. Thanks, Simon. Brad, we are ready for the next question.
Operator: The next question comes from Jim Schneider of Goldman Sachs. Your line is open sir. |
7,751 | VZ | 2 | 2,024 | 2024-07-22 08:30:00 | Verizon Communications Inc. | 415,798 | Operator: The next question comes from Jim Schneider of Goldman Sachs. Your line is open sir.
Jim Schneider: Good morning. Thanks for taking my questions. Two, if I may. First, on broadband. Could you comment on sort of the overall health of the broadband market that you are seeing? And then maybe any more quantitative guidance you can give us on the amount of headroom you see in your overall network capacity relative to fixed wireless subscribers? And then secondly, on the wireless side. In terms of the service revenue growth, what's your level of confidence that you can drive more volume growth and still maintain the same level of pricing power over the next 12 months or so? And how do you expect that volume price split to work out for you over the next year or so? |
7,752 | VZ | 2 | 2,024 | 2024-07-22 08:30:00 | Verizon Communications Inc. | 415,798 | Hans Vestberg: So on the broadband, I think again, we are between 375,000 to 400,000 net adds in broadband this quarter, been it for quite a while. So we see it as a very healthy. I think also we have a really good offering. And now with myHome that we just announced, I think we are going to be even stronger on it. So we see it healthy. Of course, Fios is by far the best fiber product in the market. And then fixed wireless access, the differentiation of the product, how we deploy it, how the customer provision it so different. And with all the streaming agreements we have right now, we can scale that horizontally to all our customers. So I see it is a very healthy business for us today. When it comes to our capacity on fixed wireless access -- yet again, I mean as we said, less than -- around 50% of all the traffic is now on C-band. So we have a way to go and we have deployed only a portion. So as we deploy more, we of course open up more opportunities. Finally, and maybe Tony has some addition. On the volume growth, I'm excited of what we have done in the consumer side with myPlan, and all the new innovations were done with our customers, and we see it resonate with the market. And clearly, quarter-by-quarter, we have improved both our revenue but also operation volumes on postpaid. Prepaid you saw it yourself, a big step forward on prepaid this quarter. And then our business side, I mean Kyle and the team has been now for I’m not sure how many quarters been around 125, up to 150 net adds on wireless. So all-in-all, I see that with the offerings that we put into the market, the refresh of the brand that is supporting that we are in a good position going into the second half of this year. Tony, any additions to that? |
7,753 | VZ | 2 | 2,024 | 2024-07-22 08:30:00 | Verizon Communications Inc. | 415,798 | Tony Skiadas: Yeah. Thanks, Hans. So very comfortable with the revenue guide for the year. As Hans said, the performance and execution is very much on track, and we continue to find a better balance of P&Q. And you see the progress on volumes, as Hans said, B2 mobility and SWA. And maybe just a few additional points to consider. First we expect to see sequential growth in service revenue in the second half of the year. Also, I would say the year-over-year comps are a little more challenging in the second half as we lap the pricing changes from 2023. The wildcard obviously, is the promotional environment and the level of upgrades we'll have to see where that goes. But having said all that, the assumptions that we have in the service revenue guide have not changed. So overall, we feel good about our revenue performance and the momentum in the business, and we're not going to guide on '25 at this time, but I would tell you that those assumptions will carry forward as well.
Jim Schneider: Thanks.
Brady Connor: Brad, we are ready for the next question.
Operator: The next question comes from Sebastiano Petti of JPMorgan. Your line is open sir. |
7,754 | VZ | 2 | 2,024 | 2024-07-22 08:30:00 | Verizon Communications Inc. | 415,798 | Operator: The next question comes from Sebastiano Petti of JPMorgan. Your line is open sir.
Sebastiano Petti: Hi, thanks for taking the question. Just wanted to follow up on the 2024 consumer postpaid phone expectations to report positive net adds for the year, excluding the second-line. If you could perhaps maybe help us think about the pace or expectations for the second-line contribution in the back half of the year? Obviously, a pretty healthy run rate here in the second quarter on a full quarterly basis relative to the first quarter. So just how should we think about that in terms of trying to unpack the underlying benefit relative to the second-line benefit? And then, Tony another quick question, just helpful color there on service revenue expectations, quarterly growth over the balance of the year. But can you perhaps help us think about margins? Obviously, decent -- nice growth here in the second quarter in business. How should we think about the contribution or perhaps from the HCL Tech Managed Services savings coming through? And I think you also mentioned there was a voluntary separation program in the market. I think we had seen headlines to that intra-quarter. How should we think about maybe the contributions from those two items impacting margin and maybe EBITDA growth expectations or how you're thinking about the phasing of those in the back half. Thank you. |
7,755 | VZ | 2 | 2,024 | 2024-07-22 08:30:00 | Verizon Communications Inc. | 415,798 | Hans Vestberg: Thank you. I'll start and Tony will give you the details. As we said before, I mean the second-line offering is straight into our strategy. The strategy is to build the network ones and have as many profitable connections on top of it in order to get the best return on invested capital. And you can see that is really happening, and that's been a very big focus for us. Tony will give you some more details on how it looks in the second half here. On the programs of cost, we put in last year a couple of really large programs all the way from agreement with HL together with large customer care changes. Many of those are now coming into the base, and that's why you see the leverage. But we also have quite a lot of new things coming up. And as you rightfully mentioned, we have a voluntary separation program that is ongoing right now. We also have all the efficiencies with AI that is coming through. And of course we continue with our disciplined approach on investments. So all-in-all, there is more things to come. And -- but we have gotten leverage from some of the things we did last year, Tony. |
7,756 | VZ | 2 | 2,024 | 2024-07-22 08:30:00 | Verizon Communications Inc. | 415,798 | Tony Skiadas: Thanks. Hi, Sebastiano. On the second number, just a few points, Hans touched on this upfront, but this is a great business. We are providing customers options and flexibility. It is a very profitable connection and we would do it every day of the week. In terms of the market for this, we'll see how the TAM evolves. We shared the gross add impact you can assume some level of churn in the quarter. Looking ahead, we expect less of a contribution from second number in the back half of the year. It is high-margin business comparable to ARPU [add-a-line] (ph) offerings. The ARPU is very good and very comparable to add-a-line, without the device subsidy. And as we said in the prepared remarks, we expect to have positive phone net adds in consumer for the year without the contribution from second number. And the results in the quarter reflect the strength of our core business. And then on your question on EBITDA and cost transformation, we're very comfortable with the EBITDA guide. We made a lot of progress. You saw the 80 basis points of margin expansion in the quarter. And the program in terms of delivering cost transformation is on track. Hans talked about some of the work we are doing, and we did last year with customer care and with managed services. We have a lot of work going on right now between IT and real estate, and network decommissioning. In addition, Hans mentioned the voluntary separation program. And some of that savings will start manifesting in the back end of this year and into 2025. And then lastly AI is an enabler of efficiencies. You can think about customer care, you can think about the personalization with myPlan. And we see efficiencies coming from there as well. But we're very much on track. We are operating differently. And we feel good about the progress on cost actions that are driving the improvements in EBITDA that you see in the first half of the year.
Sebastiano Petti: Great. Thank you for the question. |
7,757 | VZ | 2 | 2,024 | 2024-07-22 08:30:00 | Verizon Communications Inc. | 415,798 | Sebastiano Petti: Great. Thank you for the question.
Brady Connor : Yeah, thanks Sebastiano. Brad we are ready for the next question please.
Operator: The next question comes from Michael Rollins of Citi. Your line is open.
Michael Rollins: Thanks and good morning. I'm curious on the pricing front, where does in wireless postpaid the back book sit on average relative to your front book offers? And do you think the pricing environment in the postpaid wireless category can start to look more like fixed broadband or the video product categories where those products have tended to see some kind of pricing actions on a somewhat annual basis?
Hans Vestberg: Thank you Mike. I think in general, when we see the value accretion we have done recently, very much about new offerings to see that our customers are getting more value from the offerings we have. We have done some price adjustments historically. I think that Sampath in the consumer side has said that he would get better balance between volume and value increases. So that's what you see right now. And then on the business side, we have constantly done a great job. I mean Kyle and his team has constantly continue with a really high market share, continue to gain in every area like government, large enterprise and SMBs. So in the quarter you saw that the offerings we're doing with myHome and the additions on myPlan. And of course, with also the new offerings in business, Business Complete which is a new way to serve our SMBs. All of them are accretive and value but also giving our customers better services. So that's how we continue to work. And we are in sort of the third-phase of wireless where wireless is so important for our customers, and we see it also as an opportunity with the largest direct-to-consumer business in the country to actually add support with them with new services and layering on. Tony? |
7,758 | VZ | 2 | 2,024 | 2024-07-22 08:30:00 | Verizon Communications Inc. | 415,798 | Tony Skiadas: Yes. Just a couple of other things to add. I mean as we said upfront, we said we need to find a better balance of P&Q in 2024, and we are doing that. We are very confident, Mike in our back book. We've been very consistent, as Hans said, about evaluating pricing opportunities, aligning the price with the value proposition for customers. We did take pricing actions in the first half of the year that provide a good tailwind to service revenue, and those pricing actions were contemplated in the guide, but it wouldn't be appropriate to comment on what we might do in the future.
Michael Rollins: Yeah, thanks.
Brady Connor: Thanks Mike. Brad we are ready for the next question.
Operator: The next question comes from David Barden of Bank of America. Please go ahead with your question sir.
David Barden: Hi guys. Thanks so much. So Tony, yes, you guys had real demonstrable success on the P side of the equation and it helps to be the industry upward. Can we talk a little bit more about the Q -- the account number that you reported this quarter, I think it's the lowest that we've seen since the data I have going back from 2016. And so the way that the queue is growing is by kind of a shrinking number of accounts, but putting more and more into those accounts. I'm guessing the second-line strategy is one of those strategies. But can you talk a little bit about what kind of duration, durability this approach to growth has and -- or do we need to see accounts grow in order to believe that Verizon is really on the right growth path? Thanks. |
7,759 | VZ | 2 | 2,024 | 2024-07-22 08:30:00 | Verizon Communications Inc. | 415,798 | Hans Vestberg: Hi, David. Good morning. So look as we said before, finding the right balance of P&Q. And I think you've heard Sampath and I talk about something like 80-20 price-volume mix last year was more like 100, so clearly making progress on that. And keep in mind, we have a very high-quality customer base, and we see it in the results quarter-after-quarter. And I think you see the momentum in both gross adds and in net adds in the quarter, and it is very high-quality growth, both on the consumer and the business side. Business had a very strong quarter as well on volumes. And you also see the growth in fixed wireless access. We did 378,000 fixed wireless access net adds that continue to provide a tailwind to service revenue. So we are trying to find that right balance of P&Q, and I think the results reflect that.
David Barden: Great.
Brady Connor: Thanks Dave. Brad we are ready for the next question.
Operator: The next question comes from Peter Supino of Wolfe Research. Your line is open sir.
Peter Supino: Good morning. Thanks. A question about capital allocation. As we approach 2025 and your leverage target, I'm wondering how you would encourage us to think or how you do think about the possibility of building more fiber as opportunity costing that against share repurchases. I wonder how you think about the returns on each of those projects. And separately, to the extent that capital is scarce, is there an argument for maintaining leverage at a constant level and even more of above? Thank you. |
7,760 | VZ | 2 | 2,024 | 2024-07-22 08:30:00 | Verizon Communications Inc. | 415,798 | Hans Vestberg: Hi, Peter. When it comes to our capital allocation priorities, they haven't changed. I mean first of all, we put the money in the business. And this year, we have the guide between [$17 billion and $17.5 billion] (ph). So -- but of course, if we see opportunities to gain more revenue and grow business, we will always look into the business side. Secondly, the dividend is very important. I mean we have now been growing our dividend for 17 consecutive quarters. And Tony and my job of -- years, not quarters. And Tony and I are committed to continue to put the Board in a position to do that. And you see on our pay ratio, we're well inside that ratio doing well. And then we're paying down our debt. We paid down debt this quarter. Second half, we're going to continue with that. We will not consider any conversation about buybacks until we get to 225. And after that there is a lot of factors in the market, the priorities but also where is the interest rates, where is share price and all of that. So let us focus on the priority in the order we have said, and that's how we are going to continue for the next foreseeable future.
Brady Connor: Thanks Peter. Brad, we are ready for the next question.
Operator: The next question comes from Craig Moffett of MoffettNathanson. Please go ahead with your question sir.
Craig Moffett: Thanks. I want to return to the upgrade cycle. Apple is obviously betting that they can drive a significant upgrade cycle with AI. I wonder if you could just talk about the percentage of phones in your base that are, I believe Apple's requirement will be 8 gigabytes of RAM and -- meaning it's going to be the iPhone 15 Pro or Pro Max. What percentage of your phones are already of that level? And how many would presumably require upgrades? And then how you just -- how do you think about how quickly that upgrade cycle comes and what that might mean in terms of the cost and margins for your wireless business? |
7,761 | VZ | 2 | 2,024 | 2024-07-22 08:30:00 | Verizon Communications Inc. | 415,798 | Hans Vestberg: Thank you, Craig. I don't have the exact number, but I know that we have a fair amount of new phones, of course in the base because with our high quality customer base on postpaid, many of our customers are already on later versions of the iPhones. Again looking into this cycle, I mean, -- of course, we are going to see some excitement around AI. I don't think that it is going to be any particular at this time. It will be over time, maybe. We have a very disciplined model when it comes to a approach expectations for promotion, et cetera. We will stick to that. we believe that we have such a great network, great offerings. So we can actually manage that, and we will continue to do so. And then talking about the AI. I mean I think where I'm most excited is, of course that we have built sort of the Verizon Intelligent edge network which will be the platform for the GenAI economy because you are going to have to have a lot more compute storage at the edge of the network, and that's how we built the network already 2018 with fiber to all our main hubs and between our main subcenters. And then on top of that, we have cooling and power at those edges. And I think as we go from the LLMs and we go into sort of doing commercial products for enterprises. Our network is set up for that. And so I'm very excited for that opportunity going forward together with private networks. So – there is a lot of things coming into GenAI devices, our efficiencies but also a business opportunity for us when it comes to AI.
Brady Connor : Great, thanks Craig. Brad, we are ready for the next question.
Operator: The next question comes from Frank Louthan of Raymond James. Your line is open sir. |
7,762 | VZ | 2 | 2,024 | 2024-07-22 08:30:00 | Verizon Communications Inc. | 415,798 | Operator: The next question comes from Frank Louthan of Raymond James. Your line is open sir.
Frank Louthan: Great. Thank you. To what extent do you think that fixed mobile conversion will be more of the norm in the US? And given your smaller wireline footprint, do you think you need to expand your fiber-to-the-home assets? Or how would you address that? And then want to clarify the target leverage you are looking for, is that 2.2 times total leverage or 2.2 times unsecured? Thanks.
Hans Vestberg: On the mobile convergence fixed mobile convergence, we see some uptick on that. As I said before, we will follow the customers. We have all these economics on wireless and on broadband. And we will see that if our customer wants to have a converged product, we will do that. I don't believe in sort of discounting products to get there. But of course, our efficiency if one customer has both mobility and broadband from us, and we will see that we share that with our customers as an opportunity. So I don't think we are going to see the European levels here because of the nature of the market. But as we move further into convergence, we will be very well positioned with the products we have. Tony, on the leverage?
Tony Skiadas: Yes. So Frank, on the leverage metric, the long-term goal is 1.75 to 2 on the unsecured. And then we said we would consider buybacks when we got to 2.25, again unsecured.
Frank Louthan: Okay, great. Thank you.
Brady Connor: Yeah, thanks Frank. We are ready for the next question.
Operator: The next question comes from Tim Horan of Oppenheimer. Your line is open sir. |
7,763 | VZ | 2 | 2,024 | 2024-07-22 08:30:00 | Verizon Communications Inc. | 415,798 | Operator: The next question comes from Tim Horan of Oppenheimer. Your line is open sir.
Timothy Horan: Hi, guys. Focusing back on the network. I know the C-band initial deployments were just for a portion of the spectrum and they weren't used in the full range of technologies. And I know you said 60%. Can you talk about -- where are you with kind of upgrading to the entire C-band level of spectrum and to Massive MIMO and also then to stand-alone? And kind of related to this, I know you saw some major network improvements with the initial upgrades or build out to C-band. Can you talk about what you're seeing when you go back with the second upgrade? And I have a follow-up on what you do with AI? Thank you.
Hans Vestberg: On the C-band, you are right. We almost have now 50% of our traffic on the C-band, but we still have some deployment to be done in suburban and rural. Many of those sites are prepared for it, so we are just rolling out as we speak right now. So we are going to see that continue. Joe and his team in technology, very much focused on customer satisfaction when it comes to the rollout and revenue generation right now. That's the main focus we have at Verizon. And the same trend as we saw in the beginning where we have better upgrades, lower churn, whereas C-band and of course also getting fixed wireless access opportunity. The same goes for where we are enhancing or continuing to new areas. Secondly you asked about all the new features coming into 5G advance with SA, Massive MIMO, all of that is just expanding our capacity and bringing even more opportunities for us for revenue and seeing that we create the customer expectations on the best network in the nation. So -- and that's just -- we're just in the beginning of that. So I'm very pleased with what I see. The team is running as fast as we can and we get good feedback on C-band. Tony? |
7,764 | VZ | 2 | 2,024 | 2024-07-22 08:30:00 | Verizon Communications Inc. | 415,798 | Tony Skiadas: Yes. Thanks, Hans. So just a couple of other points. On C-band, we are seeing good improvements in churn 3 basis points. On gross adds, we see about 9 basis points gross add strength. And as we deploy suburban and rural gross adds are up threefold in those markets. And then premium mix continues to be stronger as well of about 10%. And we do have now at this point nearly 60% of our planned sites are now deployed with C-band. So really making really good progress.
Timothy Horan: And I'm assuming you need stand-alone to enable some of these AI/MEC applications you're talking about, and I can be wrong about that, but any upgrade on the timing of when standalone gets deployed nationwide? And do you have any of these AI/MEC applications that are up and running now? Thanks.
Hans Vestberg: We can do mobile edge compute without SA. We have done that for five years. Then there are some efficiencies on especially private networks and deployment with SA. But again, you need a full ecosystem all the way from the devices and the network features and the core in order to do that. So it is a little bit of a holistic thinking again when we work it, but we can already deliver that right now. When it comes to GenAI in mobile edge compute, that -- we don't have that to our customers right now. But the conversation with many of both the cloud players as well as enterprises of doing that when they have commercial products, and not only training large language modules. And that's how we designed our network. So that's why I'm excited of it. At the same time, we already have four GenAI products in the market that is deployed on 40,000 agents to all our stores, et cetera personalization, more efficiency for customer and employee experience. And we see a great opportunity for that. So there are multiple opportunities with AI for us and we have been on to it for a long time.
Timothy Horan: Great.
Brady Connor: Thanks Tim. Brad we are ready for the next question. |
7,765 | VZ | 2 | 2,024 | 2024-07-22 08:30:00 | Verizon Communications Inc. | 415,798 | Timothy Horan: Great.
Brady Connor: Thanks Tim. Brad we are ready for the next question.
Operator: The next question comes from Walter Piecyk of LightShed. Your line is open sir.
Walter Piecyk: Thanks. Tony, I think in the prepared remarks, you referenced voluntary separation program in June. I wonder if you can give us a sense of -- I mean I know you've done these in the past potential EBITDA benefit. And just remind us, does this result like in, I guess, onetime charges relative to the severance or the separation payments that are made and just kind of quantify that a bit, if you can?
Tony Skiadas: Sure. Hi Walt. So a couple of things. We announced the program in early June for a portion of our workforce. The process is not going to be fully completed until the back end of August. So I don't have numbers at this point. It was contemplated in their full year guide. And we do expect to see savings towards the back end of 2024 and into 2025, and we'll come back with disclosures on the program once it is finalized. We'll file an 8-K similar to how we did it last time. |
7,766 | VZ | 2 | 2,024 | 2024-07-22 08:30:00 | Verizon Communications Inc. | 415,798 | Walter Piecyk: Okay. And then Hans, it is not a reported number, but you can kind of calculate what wholesale revenue looks like and we know who the principal driver of that is. It seemed like that was kind of strong this quarter sequentially. I don't know, if there is some seasonality there. I'm looking last year and the year before, it doesn't seem like that. So is this a good thing or a bad thing, obviously, because it could imply stronger growth at a wholesale customer at the expense of your retail business. And just can you give us a sense in general of your outlook for that line. There has been some discussion and debate about how some terms can change or other offloading activities can occur for that customer. So just if you can comment on the quarter and just generally your outlook for wholesale in terms of a component of your sectors of growth, like how important is wholesale in terms of meeting the growth targets that you promised the Board?
Hans Vestberg: I don't have any comments on the quarter on the numbers. We try to have our Chinese [Walls] (ph) here, so I don't have it. But in general, we see these partnership has imported enterprise customers. And it goes back to the strategy we have, meaning we build the network once. And we have -- want to have as many profitable connections on top of the network in order to get the best return on invested capital. So that's where we are. And we have a good relationship with the [MVNO] (ph) customers, and we have many of them, and it will continue. Tony?
Tony Skiadas: Yes. Look, I mean the – it is very profitable business, as Hans said and is a great contribution to revenue and EBITDA consistent with the strategy to monetize the network, and we are very comfortable with the arrangements we have, but that's as far as we can go. |
7,767 | VZ | 2 | 2,024 | 2024-07-22 08:30:00 | Verizon Communications Inc. | 415,798 | Walter Piecyk: Can I just pivot and just -- then just ask one related but kind of high level question. There has been some reports of T-Mobile doing some additional fiber asset joint partnerships. If the administration changes, maybe there's opportunities for some additional vertical integration. But I guess the big question is, at least for me, how important is it in the long-term for you to have a vertical solution for customers, meaning that the consumer can buy their home broadband and their wireless services from you or -- and if you're not doing that obviously, outside of the Fios markets, is that a risk if others put together that vertical solution?
Hans Vestberg: We are well positioned in that area. And again if the market go convergence between mobility and broadband, we will be there to serve our customers either with Fios and fixed wireless access. And right now, that's working really good for us. So we are happy with our assets we have and how we're deploying them right now. We're looking into how we can continue to meet our customer demands. And now we also launched, as you saw in the quarter on the consumer side, myHome where we have all the benefits we had from myPlan. We are moving over to myHome. I feel good about what our consumer division is doing on broadband and mobility at the moment with the product. We are Number One in the market, so we just need to continue to keep the lead and continue to keep innovating, and I feel good about the consumer team doing that.
Walter Piecyk: Thank you.
Brady Connor: Thanks Walt. Brad, we are ready for the next question.
Operator: The next question comes from Sam McHugh of BNP Paribas. Your line is open sir. |
7,768 | VZ | 2 | 2,024 | 2024-07-22 08:30:00 | Verizon Communications Inc. | 415,798 | Operator: The next question comes from Sam McHugh of BNP Paribas. Your line is open sir.
Sam McHugh: Good morning guys. Two quick questions. In the last few years, you've gone through quite a big reinvestment phase, I guess in the consumer division with the launch of myPlan, the refresh of the brand this quarter. As we look out kind of the next two or three years and take a big step back, should we think you are now at a place where EBITDA can sustainably grow ahead of service revenues? Yes, that's question one. And the second part just a clarification. Tony, you mentioned something about 2H wireless service revenue trends versus the first half. If you wouldn't mind just repeating it, that would be very helpful. Thank you.
Hans Vestberg: When it comes to continue to have leverage on our EBITDA together with our service revenue, I think it is clear for us that the KPIs that we are measured on as a management team and me, myself is on the growth on the service revenue, wireless service revenue expansion as well as EBITDA and cash flow. And that's how we are working holistically. So yes, we -- our goal is to see that we have the leverage on our service revenue growth right now. We have great products. We work with efficiency. There are of course, pressures in our business as and the business, but that's what we strive for. But we don't guide for '25 or something like that at this moment, we will come back on that. But our work and our KPIs are set up for that. Tony? |
7,769 | VZ | 2 | 2,024 | 2024-07-22 08:30:00 | Verizon Communications Inc. | 415,798 | Tony Skiadas: Thanks. Hi, Sam. So on the service revenue for the second half, what we said is we expect to see sequential growth in service revenue in the second half. And when we talked about the assumptions that we had in the guide, we said, look we had pricing actions that we've already taken and you see that well over $1 billion. We also said we have an improving volume profile in consumer and you see that progress. Fixed wireless access continues to scale. And we have over $500 million now in fixed wireless access revenue on a run rate of over $2 billion and that base of business continues to grow. We also said we had headwinds in prepaid, and that's improving, and we will see that improving as time goes on and then from our amortization. And the promo discipline continues to be encouraging, and we say we see a similar level year-over-year. So those assumptions haven't changed and we feel really good about the performance on service revenue, and the momentum we have in the business heading into the second half.
Sam McHugh: Awesome thanks.
Brady Connor: Great. Thanks Sam. Brad, we have time for one last question, please.
Operator: Your last question will come from Bryan Kraft of Deutsche Bank. Your line is open sir.
Bryan Kraft: Thanks good morning. I have one for Tony and one for Hans. Tony, regarding free cash flow, it's up, I think, about 12% year-over-year in the first half. do you anticipate being able to grow free cash flow this year? Or is the year-to-date growth we've seen more a function of favorable timing in the first half with higher CapEx and working capital usage coming in the second half? And then Hans, you had talked quite a bit about Verizon's strong position for AI and enterprise. Is there anything you can share on what you're seeing in 5G enterprise adoption and also on the sales pipeline activity that you are seeing? Thank you. |
7,770 | VZ | 2 | 2,024 | 2024-07-22 08:30:00 | Verizon Communications Inc. | 415,798 | Hans Vestberg: I'll start with the first one, and then I can hand it over to Tony on the cash flow. Yes, what we see is private networks continue to grow in volume and -- which is a prelude, you start with the private network then you start adding on applications on it. And of course ultimately, you put in mobile edge compute. We have all that set up since 2018, 2019, and we start seeing more and more business case for logistics centers, for factories, et cetera where we can do it. And then GenAI will only sort of capitalize that and do it even faster. That is going to take some time because right now, many corporation enterprises are in the learning process, meaning they are training their data sets. So it is going to take some time. But I don't think that anyone is even close to be as well-positioned as we are in GenAI and the [GenAI economy] (ph), both for taking advantage of it efficiency-wise, internally but definitely from a revenue point of view over time.
Tony Skiadas: Thanks. Hi Bryan. So on free cash flow, overall the cash generation of the business continues to be very strong. In the first half of the year, free cash flow was $8.5 billion, up 7% and we were able to grow cash flow in the second quarter, even with an incremental $1.7 billion in cash taxes. And as we said in April, we expect free cash flow to have a similar shape to last year and build throughout the year. And we still see the same puts and takes on free cash flow for the full year, as we described back in January. And within that framework, we see slightly more incremental pressure from cash taxes. And offsetting that is the lower upgrades, and we'll have to see where that goes. But overall, the strong position and cash flow puts us in a position to pay down debt in the second half of 2024, and we are on track to do so.
Bryan Kraft: Thanks very much.
Brady Connor: Great. Brad that’s all the time we have for today. |
7,771 | VZ | 2 | 2,024 | 2024-07-22 08:30:00 | Verizon Communications Inc. | 415,798 | Bryan Kraft: Thanks very much.
Brady Connor: Great. Brad that’s all the time we have for today.
Operator: This concludes the conference call for today. Thank you for your participation and for using Verizon Conference Services. You may now disconnect. |
7,772 | VZ | 1 | 2,024 | 2024-04-22 10:00:00 | Verizon Communications Inc. | 415,798 | Operator: Good morning and welcome to the Verizon First Quarter 2024 Earnings Conference Call. At this time, all participants have been placed in a listen-only mode, and the floor will be open for questions following the presentation. [Operator Instructions] Today's conference is being recorded. If you have any objections, you may disconnect at this time. It is now my pleasure to turn the call over to your host, Mr. Brady Connor, Senior Vice President, Investor Relations.
Brady Connor : Thanks, Brad. Good morning, everyone, and welcome to our First Quarter Earnings Conference Call. I'm Brady Connor, and I'm joined by our Chairman and Chief Executive Officer, Hans Vestberg, as well as our Chief Financial Officer, Tony Skiadas. Before we begin, I'd like to draw your attention to our Safe Harbor Statement, which can be found on Slide 2 of the presentation. Information in this presentation contains statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. Discussion of factors that may affect future results is contained in Verizon's filings with the SEC which are available on our investor relations website. This presentation contains certain non-GAAP financial measures. Reconciliation of these non-GAAP measures to the most directly comparable GAAP measures are included in the financial materials posted on our website. Earlier this morning, we posted to our investor relations website a detailed review of our first quarter results. You'll find additional details in the earnings materials on our website. With that, I'll turn the call over to Hans. |
7,773 | VZ | 1 | 2,024 | 2024-04-22 10:00:00 | Verizon Communications Inc. | 415,798 | Hans Vestberg : Thank you, Brady. Good morning, everyone, and welcome to our first quarter 2024 earnings call. I'm pleased to report that we have started the year with a solid momentum, building on the progress we made throughout 2023. Our results this quarter further validate that our strategy is working and position us well for a profitable growth this year. Our execution in the first quarter keeps us on track towards our full year 2024 guidance, as we continue to deliver against our key financial metrics. We grew Wireless Service revenue and adjusted EBITDA and generated solid free cash flow. Operational Excellence is our priority. Our team is delivering. We have the right strategy, and we're working to keep this progress up quarter-by-quarter. It has been a busy quarter across our business. We produced big moments at the Super Bowl. Published our first consumer connections report, achieved milestones in our C-band rollout, added new members to our leadership team, published our annual ESG report, accomplished many goals with Citizen Verizon and completed a pension transaction that increases our financial flexibility. Verizon has a differentiated position in the industry. We have the highest quality customer base in consumer and business, the largest adjusted EBITDA, and a great team that knows how to execute our strategy. Turning to our first quarter results, Wireless Service revenue growth climbed to 3.3%. Our revenue performance combined with our work on cost efficiency programs translated to a $12.1 billion adjusted EBITDA, that's a year-over-year growth of 1.4%. We generated $2.7 billion in free cash flow and we expect free cash flow to build throughout the year, similar to 2023. Our core products on mobility, broadband and private networks are at the center of people's lives and businesses. Connectivity is only becoming more vital with each passing day, and our investments and world-class network ensure that our customers can depend on us to deliver the reliable, high-quality experience they deserve. |
7,774 | VZ | 1 | 2,024 | 2024-04-22 10:00:00 | Verizon Communications Inc. | 415,798 | world-class network ensure that our customers can depend on us to deliver the reliable, high-quality experience they deserve. Now, let me go into some specifics about this quarter. Our consumer team is executing extremely well. Despite taking further pricing action this quarter, our postpaid phone net adds performance improved year-over-year, evidence of how our differentiated value proposition is resonating with customers. Our net loss of 158,000 is more than 100,000 net adds better than our first quarter performance in 2023. This achievement was fueled by continued momentum in postpaid phone gross adds, which grew more than 5% year-over-year. We mitigated churn impacts from pricing actions through laser-focused retention efforts and the strength of our value proposition. These results represented Verizon Consumer Group's strongest first quarter postpaid phone net adds performance since 2018. Our targeted and segmented go-to-market approach, combined with myPlan and its exclusive perks, is clearly working. With myPlan, we are building a recurring revenue stream out of perks and services. These incentives, like our popular Netflix plus Max bundle, add value and deepen our customer relationships. We know our customers extremely well and tailor our offerings to their needs. We're bringing the same proven approach to our prepaid business. Within the quarter, we established our new value market leadership team, bringing in experts to execute our plans with speed and discipline. While there is still work to be done, we're seeing early signs of progress, in Visible and Total By Verizon. In February, we stopped processing new affordable connectivity program activations, which caused headwinds for our SafeLink brand. The ACP may shut down, but Verizon is committed to providing households with access to high-quality connectivity and reliable home internet without data caps, and does not believe that income should be a barrier to access. Since 2020 we have offered high speed home internet to qualifying customers for as |
7,775 | VZ | 1 | 2,024 | 2024-04-22 10:00:00 | Verizon Communications Inc. | 415,798 | that income should be a barrier to access. Since 2020 we have offered high speed home internet to qualifying customers for as low as $20 a month through our Verizon forward program and we have other plans to reach households who rely on ACP. For business mobility, postpaid phone net adds were 90,000. The team continues to put up subscriber growth as a market share leader in a competitive environment even while implementing pricing actions within the quarter. More businesses rely on Verizon than any other provider to deliver mission-critical support for their day-to-day operations. In total, first quarter post-paid phone net losses were 68,000, a 59,000 net loss improvement versus prior year. We're exiting the quarter with both consumer and business delivering their strongest performance in March, a good sign for the year ahead. Our broadband business continues to be a key growth engine, now serving more than 11 million subscribers. We have grown our base 18% over the last year and our network is a critical part of the infrastructure that homes and businesses rely on. Fixed wireless access has turned out to be a large and growing opportunity. This is now a meaningful piece of our business. We knew that fixed wireless access would be a hit with consumers who like its quality, reliability and easy setup. Businesses are showing similar excitement as this was our biggest quarter-to-date for the net adds in business fixed wireless access with 151,000 setting our new high. Fios remains extremely popular, with one of the highest third-party net promoters scored in the industry. And as we already know, Fios is the best pure broadband offering in the country. Together, Our total broadband portfolio delivered a strong quarter with 389,000 net adds. As with mobility, we saw good momentum with the broadband net adds as we exited the quarter and we expect that to continue. We also had a great quarter in private networks, signing transformative deals across industries. Xerox selected our Network and Service solution as its |
7,776 | VZ | 1 | 2,024 | 2024-04-22 10:00:00 | Verizon Communications Inc. | 415,798 | in private networks, signing transformative deals across industries. Xerox selected our Network and Service solution as its framework for modernizing its information technology system. We also signed a new private network deal with the global power solution leader, Cummins Inc. And iconic American sport leagues are turning to us for the networks that serve their fans, players, and coaches. We're on the field, on the aisles, and in the stands, and in the parking lots. During the quarter, we held a partner summit where we unveiled our sports and entertainment strategy. We are at the center of the culture moments that matter the most to our customers, from concerts and performance to athletic achievements and competition. We're already in every National Football League stadium in the country. We're now expanding services with NFL teams, including the installation of a private 5G network at the L.A. Chargers Training facility. We also renewed our partnership as the official 5G network of the National Hockey League in the United States and are expanding services throughout its arenas. As you may have seen in our consumer connection report during the ‘23-‘24 NFL season, the average fan used more data than the year before. These live moments matter to our customers and they want to share them by text, by phone and by video. We are a vital part of their experiences. Our private networks business is growing and full of long-term contracts with the best partners around the world. All of this is supported by the infrastructure we have built and are building. We operate the nation's most reliable and robust network for all customers from households to global enterprises. Recently, we passed 250 million POPs covered with C-Band, achieving our target almost a year ahead of plan. The pace and quality of our build out is spectacular. And most importantly, our customers love the C-band experience. In the first 76 markets where we rolled out C-band, we see a higher premium mix and reduced churn. Our strategy from the start was to |
7,777 | VZ | 1 | 2,024 | 2024-04-22 10:00:00 | Verizon Communications Inc. | 415,798 | first 76 markets where we rolled out C-band, we see a higher premium mix and reduced churn. Our strategy from the start was to build a network once, to meet the needs of the present, and to optimize it for the future, and we're doing just that. We have been working with AI for several years, and our powerful network position Verizon to lead the AI revolution. In 2023, we released a set of responsible AI principles to guide our efforts to leverage new AI technologies in ways that positively impact our stakeholders and establish Verizon, as a trusted brand and partner with respect to AI. Enabling AI at scale for improved customer service is a key. We're also aggressively driving AI transformative potential with our businesses, something our network was built to support. We already had several generative AI projects going live. Our AI strategy focuses on three priorities. First, optimizing internal processes and operations through machine learning, such as creating efficiencies in fuel consumption. AI is already centered to our cost transformation program and will become even more important over time. Secondly, enhancing product experiences with AI capabilities like the personalized plan recommendation on myPlan, which is producing good early results. And thirdly, establishing an AI-based revenue stream by commercializing our network's unique low latency, high bandwidth, and robust mobile edge compute capabilities. Generative AI workloads represent a great long-term opportunity for us. As we expand our network and increase our performance advantage, we're also making Verizon a more efficient organization. We are back to business as usual level on CapEx spend, as we had promised. And we have struck a balance between profitable growth and free cash flow that supports both our dividend and a stronger balance sheet. This gives us greater flexibility to accelerate deleveraging throughout the second half of the year, bringing us closer to our long-term leverage targets. Our dividend is healthy and secure, and our free |
7,778 | VZ | 1 | 2,024 | 2024-04-22 10:00:00 | Verizon Communications Inc. | 415,798 | second half of the year, bringing us closer to our long-term leverage targets. Our dividend is healthy and secure, and our free cash flow dividend payout ratio continues to improve. We are focused on putting our board in a position to continue to raise the dividend each year, building on our current industry record of 17 consecutive increases. Now let me turn the call over to Tony to discuss our financial and operational performance in more detail. Tony. |
7,779 | VZ | 1 | 2,024 | 2024-04-22 10:00:00 | Verizon Communications Inc. | 415,798 | Tony Skiadas : Thanks, Hans, and good morning. Our first quarter results demonstrate the strong execution of our team, building on the momentum from 2023 and delivering solid results in our three priorities of Wireless Service revenue, adjusted EBITDA, and free cash flow. We saw further improvements in postpaid phone net adds and another strong quarter of growth in our broadband subscriber base. We accomplished this while maintaining our promotional discipline as evidenced by our year-over-year adjusted EBITDA growth of 1.4% and more than 16% year-over-year free cash flow growth. Consumer post-paid phone net losses were 158,000 for the quarter, better versus the prior year by 105,000, driven by improvements in both gross adds and churn. As Hans mentioned, this represents our best first quarter performance in consumer post-paid phone net adds since 2018. We continue to see improved operational performance with consumer post-paid phone gross adds up more than 5% year-over-year. And as you heard from Hans, we exited the quarter with good momentum. The changes we made over the last few quarters, including launching a regional sales structure and updating our sales compensation plans, provide the right framework for our go-to-market approach. We believe these changes, combined with the continued success of myPlan and increased utilization of C-band, will help us sustain our momentum. Consumer postpaid phone churn of 0.83% represents a 1 basis point improvement year-over-year. This result is a reflection of the strength of our value proposition, as well as our high quality customer base. The first quarter post-paid phone net add improvement coincided with a further decline in upgrades, which were down nearly 21% year-over-year. We continue to see success with our disciplined and segmented approach to customer offers in alignment with our strategy. On the business side, we delivered 90,000 postpaid phone net adds. Business volume results were challenged early in the quarter as the team implemented pricing increases in |
7,780 | VZ | 1 | 2,024 | 2024-04-22 10:00:00 | Verizon Communications Inc. | 415,798 | phone net adds. Business volume results were challenged early in the quarter as the team implemented pricing increases in January. However, we saw positive net add momentum built throughout the quarter and we exited the quarter well positioned to continue to build on operational improvements in both mobility and broadband. That sales performance helped Verizon business achieve fixed wireless access net adds of 151,000, their best quarterly result to-date. We've been pleased with how businesses have adopted FWA and we continue to see strong demand from small businesses and enterprises which are attracted to the ease of deployment, reliability, and the flexibility of the product. Fixed wireless net adds for consumer were 203,000 resulting in a consolidated total of 354,000. This reflects the attractiveness of FWA as an alternative to traditional cable broadband, even in the market that saw muted activity. We continue to be comfortable with this pace of growth, believing it provides the right combination of base growth, ARPU accretion, and the superior experience our customers expect on the Verizon network. And our third-party Net Promoter Scores for our FWA product continue to outpace traditional cable broadband offerings, as we remain focused on building a long-term sustainable business. Overall, broadband net adds were 389,000, including 53,000 Fios Internet net adds. We're pleased with how Fios continues to grow in the marketplace, even as move activity across the country remains lower than prior years. We finished the quarter with over 11.1 million broadband subscribers, including over 3.4 million on FWA. We've now added more than 3 million broadband subscribers in the last two years alone. On prepaid, starting this quarter, we are disclosing subscriber results with and without our SafeLink brand. This disclosure provides improved transparency into our prepaid results. As a reminder, SafeLink is our government subsidy program brand offering and holds the majority of our ACP customers. The actions we've taken |
7,781 | VZ | 1 | 2,024 | 2024-04-22 10:00:00 | Verizon Communications Inc. | 415,798 | SafeLink is our government subsidy program brand offering and holds the majority of our ACP customers. The actions we've taken to scale Visible and Total by Verizon, as well as address operational execution with Straight Talk, drove improvements in our prepaid performance. Prepaid net losses excluding SafeLink were better by 146,000 year-over-year. While we are pleased to see the improvements, we still have work to do to address challenges in the prepaid business. That includes navigating the uncertainty around ACP, and we recently announced plans to provide accessible, affordable, and reliable connectivity options for those who need it most. As a reminder, we have approximately 1.1 million prepaid ACP subscribers as of the end of the first quarter. We expect the elimination of the program to result in lower wireless service revenue but have minimal impact on our adjusted EBITDA. Moving to our financials, consolidated revenue for the quarter was $33 billion, up 0.2% year-over-year. The benefits of the pricing actions we took in the quarter, combined with improved operating metrics, offset the year-over-year decrease in wireless equipment revenue due to lower upgrades. Wireless service revenue growth was 3.3% for the first quarter. This represents a significant acceleration in our revenue growth as the full year 2023 growth rate, excluding the reallocation of certain revenues, was only 1.3%. Consumer led the way with wireless service revenue growth of 3.4%, driven by ARPA growth of 4.4%, and improved year-over-year postpaid phone net add performance. In addition to targeted pricing actions, ARPA continues to benefit from the further adoption of myPlan. myPlan has been instrumental in growing our premium mix, which now stands at 42% of our postpaid phone base. We're also starting to see a growing impact from perk revenue as we scale the number of subscriptions. With over 20% of the postpaid base on myPlan, we see further opportunities for ARPA accretion as we expect to double the number of customers on myPlan in |
7,782 | VZ | 1 | 2,024 | 2024-04-22 10:00:00 | Verizon Communications Inc. | 415,798 | base on myPlan, we see further opportunities for ARPA accretion as we expect to double the number of customers on myPlan in our postpaid base by the end of this year. For the first time, we are disclosing fixed wireless access revenue within our externally released results. FWA revenue, which is included in wireless service revenue, was $452 million for the quarter, up nearly $200 million versus the prior year. Headwinds in prepaid revenue continue to partially offset the gains from ARPA performance in wireless service revenue. For the quarter, prepaid revenue declined $106 million versus the prior year. While this is an improvement over the prior quarter, it represented an approximately 60 basis point drag on total wireless service revenue growth. Consolidated adjusted EBITDA was approximately $12.1 billion for the quarter, an increase of 1.4% compared to the prior year driven by the growth in wireless service revenue, as well as the impact of lower upgrade volumes. With a full quarter's impact from our recent pricing actions, we anticipate the second quarter's adjusted EBITDA growth to accelerate year-over-year. Operating expenses, excluding depreciation and amortization and special items were down 0.5% year-over-year. Lower cost of equipment and cost of services were partially offset by an increase in SG&A. Adjusted EPS in the quarter was $1.15, down 4.2% compared to the prior year, as gains in adjusted EBITDA were more than offset by higher interest expense, predominantly due to the lower capitalized interest, now that a large portion of the C-band spectrum licenses have been placed into service. Free cash flow for the first quarter was $2.7 billion, up over 16% or nearly $400 million from the first quarter of 2023. On a full year basis, nothing has changed. With free cash flow, we still expect the same puts and takes we shared with you in January. As Hans said, we expect free cash flow to build throughout the year, similar to 2023. Cash flow from operating activities came in at $7.1 billion. Within the |
7,783 | VZ | 1 | 2,024 | 2024-04-22 10:00:00 | Verizon Communications Inc. | 415,798 | flow to build throughout the year, similar to 2023. Cash flow from operating activities came in at $7.1 billion. Within the quarter, we saw year-over-year pressures from higher interest expense, primarily related to the reduction in capitalized interest. We also made a discretionary pension contribution of $365 million prior to the closing of the retiree pension annuity transaction that we previously disclosed. CapEx for the quarter was $4.4 billion compared to $6 billion in the prior year as a result of our return to BAU levels of spend and historical levels of capital intensity. Our full year guidance of $17 billion to $17.5 billion in CapEx spending remains unchanged. Net unsecured debt at the end of the quarter was $126 billion, a $3.7 billion improvement year-over-year, and a nearly $400 million improvement sequentially. During the quarter, we issued our sixth green bond for $1 billion with proceeds committed to fund additional renewable energy purchases. Net unsecured debt was also impacted by payments of approximately $270 million related to clearance of our C-band spectrum licenses, which are now substantially complete. While these payments do not affect our free cash flow, they are a use of cash. Our net unsecured debt to consolidated adjusted EBITDA ratio was 2.6 times in-line with the previous quarter. Given the strength and momentum of our business, we continue to see a clear path to meaningfully delever the balance sheet in the second half of this year. In closing, I'm happy with our start to 2024, and our results from the first quarter set us up well to deliver on our financial guidance for the year. Our disciplined approach continues to put us in a strong position to execute on our capital allocation priorities. Our focus remains on driving operational improvements throughout the year. With that, I will now turn the call back to Hans for his closing thoughts before opening the call up for your questions. |
7,784 | VZ | 1 | 2,024 | 2024-04-22 10:00:00 | Verizon Communications Inc. | 415,798 | Hans Vestberg : Thank you, Tony. I'm proud of our team and pleased with our financial and operational performance in the first quarter. We exited the quarter with good momentum across the business positioning us well for the year ahead. We're [scaling] (ph) fixed wireless access and private networks while growing our core mobility business. Our disciplined, targeted and segmented consumer strategy continues to prove itself. And we will apply the same level of energy and execution to the prepaid market. Network excellence drives our business forward and we will not let up on that. Our consistent network investment puts us in an unmatched position to deliver AI services at scale. Finally, our cash flow generation is solid. This shows that we are executing well against our financial objectives. Our cash flow strength allows us to deliver on our capital allocation priorities, including supporting our dividend and paying down our debt. With strong momentum already in the start of the second quarter, I'm confident in our ability to sustain progress towards unlocking Verizon's full potential for all stakeholders. Now, Brady, we are ready to take questions.
Brady Connor : Thanks, Hans. Brad, we're ready for the first question.
Operator: Thank you. We will now begin the question-and-answer session. [Operator Instructions] Your first question will come from Simon Flannery of Morgan Stanley. Sir, please go ahead. |
7,785 | VZ | 1 | 2,024 | 2024-04-22 10:00:00 | Verizon Communications Inc. | 415,798 | Simon Flannery: Great. Thank you very much and good morning. Hans, maybe we can talk about the consumer a little bit. It was good to see the churn number. Perhaps you'd just talk a little bit about the impact of the pricing there. It seems like it had a drag on business but less of a drag on consumer. And just -- what are you seeing overall in the wireless market growth, it seems like the industry is continuing to grow, there's been some competitive moves by some of the cable companies recently, maybe just comment on the overall environment out there and your ability to sustain this, as well as the low upgrade rates. And then just a quick one, Tony, for you on cash flow. Thank you for the comments around the pacing through the year. Could you just talk about working capital and the impact this quarter? It seemed like there were some drags from that on the quarterly number. Thanks. |
7,786 | VZ | 1 | 2,024 | 2024-04-22 10:00:00 | Verizon Communications Inc. | 415,798 | Hans Vestberg : Thank you, Simon. Let me start with the consumer business. As we saw in the quarter, it was a little bit slow in the beginning of the quarter both for consumer and for business when it comes to wireless. But then I think we clearly see that our products are resonating with the customers. And on the consumer side, myPlan is really doing well. And as Tony said in the prepared remarks, the Perks is now coming up. Our premium is also increasing. So clearly, we see that. At the same time, the team has spent a lot of time to be disciplined both with promotions and churn management. And you saw we had the price up in the quarter on consumer that was pretty wide. But our team actually kept the churn down on the consumer side. I mean, it shows first of all how great our product is, but also see how well we're using the AI tools and all of that to see that our customers are getting the value and we are actually directing the money to the right customers. That's what you see coming out in the financial discipline in everything we're doing. Yeah, the promotions were lower again this quarter. But again, it's a way for us to segment the market to see that we have the right products. And that's what I've seen for quite a while right now on the consumer side. And what I said also is that -- we have said several times right now, we expect consumer to be positive net add this year. So they are doing it. And [Sampath] (ph) team probably have even more innovations coming. And when myPlan was one, the Perks and other, they have more things to come during the year. So I'm really excited about what we're doing on the wireless side. And of course competition is the same. There's nothing new, but it's the same as we've seen for quite a while. But we just performed way better. We have the right product, we have the right people, we have made the right changes in operation model and that's what we're seeing right now. And now we move all that into prepaid and you saw that we're also doing prepaid better but still we have |
7,787 | VZ | 1 | 2,024 | 2024-04-22 10:00:00 | Verizon Communications Inc. | 415,798 | seeing right now. And now we move all that into prepaid and you saw that we're also doing prepaid better but still we have more to be done. The team has their heads down, very focused on execution. Very pleased with what they've seen so far. That doesn't mean we're not going to push even harder going forward. Tony? |
7,788 | VZ | 1 | 2,024 | 2024-04-22 10:00:00 | Verizon Communications Inc. | 415,798 | Tony Skiadas : Yeah, sure. So good morning, Simon. So a couple of points on churn. So the results on C-band are significantly better. We see, you know, strong churn performance, higher premium mix, and also higher gross adds in C-band markets. And, you know, overall in 2024, it's reasonable to expect similar or lower churn in the consumer business compared to 2023. And then on your cash flow question, in the prepared remarks, we said that free cash flow would have a similar shape to last year and build throughout the year. We do expect free cash flow to be up meaningfully in the second quarter. We still see the same puts and takes on free cash flow for the full year as we described in January. So nothing's really changed there. On your question on the quarter, let me start with operating cash flow and let me unpack that for you. So we saw the discretionary pension contribution in the quarter. That was $365 million in connection with the pension annuitization transaction that we announced in early March. As we said previously, the lower capitalized interest from C-band now manifests itself in operating cash flow, and that was about $300 million higher year-over-year. And the third point I'd make is, you know, we're funding the business for growth and very, very confident in our ability to execute and you saw that again. You saw the growth in the fourth quarter with strong gross adds and we followed that up with 5% gross add growth in the consumer business in the first quarter. And with that growth comes working capital timing that will settle in the second quarter. But overall we're very confident in the cash generation of the business and nonetheless we expect to generate strong free cash flow and we see no obstacles in paying down debt in a meaningful way in the second half of 2024.
Simon Flannery: Great. Thanks a lot of Tony.
Brady Connor: Yeah, thanks Brad. We're ready for the next question.
Operator: The next question comes from John Hodulik of UBS. Your line is open, sir. |
7,789 | VZ | 1 | 2,024 | 2024-04-22 10:00:00 | Verizon Communications Inc. | 415,798 | Operator: The next question comes from John Hodulik of UBS. Your line is open, sir.
John Hodulik: Great, thanks and good morning, guys. First, just a couple of quick follow-ups on Simon's question. For number one, the positive commentary you guys talked about with March, does that suggest you guys could be positive in terms of consumer phone adds in the second quarter. That's number one. Number 2, the price increase seemed to be digested pretty well and you actually saw churn come down. Does that suggest you guys have more pricing power than you thought and we could see, and maybe not just for you but for the industry, and we could see more in the future that's number two. And then on ACP, I noticed you guys announced some new plans with free sort of low-end plans on the broadband side with free service for six months. You've talked about some of the headwinds as ACP goes away, but do you believe that there's an opportunity to potentially win some broadband subs as that plays out? Thanks. |
7,790 | VZ | 1 | 2,024 | 2024-04-22 10:00:00 | Verizon Communications Inc. | 415,798 | Hans Vestberg : Thank you, John. On the first question there on consumer net adds in the short-term, I stay on my previous comment. Consumer net adds should be positive in 2024. The team is of course doing quite good right now. Actually 100,000 better in the first quarter here on net adds. Let them continue to execute. They have a great product that resonates with the market. And they will continue to execute well on that. On the churn side, I think first of all, I mean, if you look at the market, of course we see both inflation and -- a higher interest rate. But think about the product, first of all, so good right now. Everybody needs wireless and broadband. And I think that -- that has improved quite dramatically over the last couple of years. Secondly, our products right now are so well segmented for different segments, for different groups. And thirdly, we're laser focused – on churn management. The team with Sampath, the AI tools we have, so we actually spend on the right customers when we see they have a churn. So all that came together despite that we had a price adjustment that was large in the consumer group in the second quarter. The same goes for our business wireless. They performed well in the quarter. They had a little bit slow in the beginning of the year, but ramped really nicely also in the quarter. And again, they are market share leader on the wireless and they continue to be positive. So I'm pleased with that. On the ACP, I will let Tony comment on it. The only thing I want to say, I think -- we think it's important that everyone in these countries should be able to have wireless and broadband because it's such an essential service today. So that's why we historically already have plans on Fios that are for low income families, but also the whole prepaid family of products we have is also addressing that. Again, going back to -- being able to support that regardless if it's the recent ACP or not, but our segmentation model. And lastly, I think on the churn, our high quality customers, which |
7,791 | VZ | 1 | 2,024 | 2024-04-22 10:00:00 | Verizon Communications Inc. | 415,798 | if it's the recent ACP or not, but our segmentation model. And lastly, I think on the churn, our high quality customers, which is best in industry, that is really playing out in this environment with the products we have. Tony? |
7,792 | VZ | 1 | 2,024 | 2024-04-22 10:00:00 | Verizon Communications Inc. | 415,798 | Tony Skiadas: Sure. And John, good morning. So in terms of ACP, we stopped enrollments in February and still accepting transfers through May. As we said previously and -- in the prepared remarks, the majority of the exposure is in the prepaid business, and we have 1.1 million prepaid subs that are in the ACP program. We've said previously that the guidance assumed that the ACP funding stays intact. The impact or any impact would be seen on service revenue up to potential 50 basis points of headwind. And the margin exposure from ACP is actually very small. It was insignificant in the first quarter. And if nothing changes and the funding goes away in May, as is planned, then we have plans in place to address it, both from retention and potential acquisition opportunities as well. And obviously we'll continue to help everybody -- update everybody as we know more.
John Hodulik: Thanks guys.
Brady Connor: Okay thanks John. Brad, we're ready for the next question.
Operator: The next question comes from Michael Rollins of Citigroup. Your line is open sir.
Michael Rollins: Thanks and good morning. I was curious if you could unpack a bit more of how you're thinking about the up-tiering opportunities within the post-paid phone base. And as you look at the Perks, is there a way that we should think about the revenue contribution from Perks and where that can go over time as an incremental way for Verizon to monetize the base? |
7,793 | VZ | 1 | 2,024 | 2024-04-22 10:00:00 | Verizon Communications Inc. | 415,798 | Hans Vestberg : Hey, thanks Mike. Yeah, This is a long-term strategy of us. First of all, we have a great base of customers. We want to give them the flexibility on the consumer side. Then we add in the Perks. Of course, all that plays into value play for our customers, even though we up tier our customers. And that has gone very well. We said in the prepared remarks that almost a quarter of our customers have myPlan right now and we are expecting it to go to almost or go to half of the base, which is never had a product moving that fast because it resonates with the market. In there -- we have opportunities for both up-tiering and then adding services, all incremental for our bottom-line and accretive. And many of these offerings are savings for our customers which is just great. The Max-Netflix is for example a great saving, great product. We are the only one in the market that can do that on wireless. It's exclusive. And that's the type of things we do on Perks, very different rather. I wouldn't say shocked, but I would be at least surprised if Sampath and the consumer team doesn't continue to think how they can enlighten our customers even more with these type of things going forward. Tony.
Tony Skiadas: Sure. And Mike, just a couple other points. So we did see 4.4% ARPA growth in the first quarter. And as Hans talked about in myPlan, the premium mix is very strong. It's 42% of the lines in the base. And the Perk attach rates have steadily increased and then will continue to increase. So we feel really good about that and the discipline we see on promotions as well and keeping the amortization pressure in check. |
7,794 | VZ | 1 | 2,024 | 2024-04-22 10:00:00 | Verizon Communications Inc. | 415,798 | Michael Rollins: And one other if I could, operational efficiency. It sounds like a few times where they were talking about AI or just the broader focus on the operations, that this is an important priority for Verizon this year. Can you frame how much of the cost-cutting Verizon can deliver this year relative to the multi-year target that the company has established? And are there any milestones that we should be looking for that will signify some further progress on these initiatives? |
7,795 | VZ | 1 | 2,024 | 2024-04-22 10:00:00 | Verizon Communications Inc. | 415,798 | Hans Vestberg : Thank you. First of all, we're on track for our cost target that we have given to the market -- to The Street. Secondly, many of the larger sort of transactions and platform transactions we started already last year, the outsourcing to ATL, the customer care changes we did, which are large transactions, without any interruptions for our customers who have done those, they are coming into the base in 2024 and of course, full year ‘25. Then what I'm adding now is our opportunities in AI. Many of these things, of course, already thought about, but of course we see a great opportunity with AI to serve our customers better. We are already using, for example, personalization in myPlan with AI, and we are using it in our network when it comes to performance of the capacity deployment, as well as power consumption. So we are using AI and generative AI already now commercially. So this is not the playing ground for us. We just see more opportunities. On the flip side, of course we also see revenues. Our network was built for AI. That was my thought when I built Verizon Intelligent Edge Network five years ago or six years ago, that we're going to have compute and storage at the Edge. AI is sort of built for that with the low latency we have on the 5G network. And as we are deploying our 5G right now, with the mobile edge compute and AI, this is a great long-term opportunity for us using AI. So there are multiple places we see efficiencies, but also revenue opportunities with all the new technologies coming. Tony, anything else on the savings? |
7,796 | VZ | 1 | 2,024 | 2024-04-22 10:00:00 | Verizon Communications Inc. | 415,798 | Tony Skiadas: Yeah, Mike, just to add a couple of things. So obviously, as Hans said, we're on track with the savings program, and those savings were contemplated in the guide. We're not going to discuss specific cost targets, but as Hans mentioned, we're operating a lot differently, and we feel really good about the cost actions that we're taking and the progress that we're making that are driving the EBITDA improvements that you saw in the first quarter and that we expect throughout 2024.
Michael Rollins: Thank you.
Brady Connor: Yeah, thanks Mike. Brad, we're ready for the next question.
Operator: The next question comes from Kannan Venkateshwar of Barclays. Your line is open, sir.
Kannan Venkateshwar: Thank you. Hans, maybe one industry question for you. There's obviously a lot of assets up for sale, some smaller ones, some potentially bigger ones. There's also been talk about your potential interest in maybe partnering with ESPN in some form. Could you talk about how you see the industry structure evolving from here? Do you see this as some kind of equilibrium? Or is there any need for -- or an opportunity from your perspective in terms of balancing your asset base in a slightly different direction. Thanks. |
7,797 | VZ | 1 | 2,024 | 2024-04-22 10:00:00 | Verizon Communications Inc. | 415,798 | Hans Vestberg : Kannan, thank you for the question. First of all, I think I said it in the beginning of the year, we're getting into a phase of the heavy investment, a lot of changes in our asset structure. We're coming into a phase where we have all the assets we need and we're executing on it. And you see the operation excellence coming out from it the last three quarters. I have a team that in many facets have actually changed quite a lot. We added two new team members this quarter. I feel really good where we stand with assets right now and how we're executing. And of course I can never say never to look into assets. That's my fiduciary responsibility. But I rather right now execute on what I have. And you see the performance when we have that with the C-band millimeter wave, the broadband growth we have, almost 400,000 again this quarter. So that's my main focus. When it comes to some of the other things, at the end you mentioned, I think we are using our base of distribution to actually work with all the streaming services. And we are uniquely positioned. We have the biggest distribution or direct-to-consumer in the market. We are taking leverage that for our customers and for our shareholders, but also seeing that we help some of these larger streaming services to see that they get better churn and of course better access to the best consumer base in the United States of America. So we will continue to do that and see that we're doing it in the right way. But again, I'm pleased with the asset base we have today.
Kannan Venkateshwar: Great.
Brady Connor: Thanks, Kannan. Brad, we're ready for the next question.
Operator: The next question comes from David Barden of Bank of America. Your line is open, sir. |
7,798 | VZ | 1 | 2,024 | 2024-04-22 10:00:00 | Verizon Communications Inc. | 415,798 | Operator: The next question comes from David Barden of Bank of America. Your line is open, sir.
David Barden: Hey, guys. Thanks for taking the questions. I guess my first one was just about the kind of the balance of revenue growth. I think that you guys talked about kind of a 60-40 balance of pricing and volumes is more normal. And over the last year it was more skewed to pricing. I was wondering if you could kind of talk about the relatively healthy 5% growth in gross adds versus what we're watching this quarter happened which is a decline in accounts. Could you talk a little bit about how you balance the relationship between accounts and gross new subscribers? And then the second question is just more of a housekeeping question which is you guys introduced the second number add-on this past quarter. There's been a lot of questions about where does that show up in the numbers. I'm guessing not in the sub-numbers. It’s probably -- could you kind of elaborate about -- where we find that in the numbers? Thank you so much. |
7,799 | VZ | 1 | 2,024 | 2024-04-22 10:00:00 | Verizon Communications Inc. | 415,798 | Hans Vestberg : Thank you, David. First of all, our team is very focused to continue to get a little bit more of volume in the consumer side. Remember, on the business side, we're already in there. We are taking customers every quarter. We have done it for not sure how many quarters. So it's a little bit different dynamic on the service -- on the consumer side, we actually had a little bit more challenge in 2022. I think since second quarter 2023 with our myPlan and offerings, you see a constant improvement how we are actually addressing our customers. So I'm really pleased with that. But we have said, or Sampath has said on the consumer side, he want to have more on the volume side than only on the value side from customers. But that doesn't mean we will continue to get more value with our customers and what we're doing. On the second line, the only thing I want to say there, first of all, the innovation the team is doing right now is based on our strategy. We build a network once and we want as many profitable connections on the network in order to have the lowest return or the best return on invested capital in the industry. It's just playing straight into that narrative and this, of course, is accretive and we would take the second-line any given time. So again, you show the innovation and I'm prepared to see or I'm ready to see even more innovation from my team going forward. Tony. |
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