Verizon delivers strong wireless service revenue and broadband subscriber growth in Q2
22 July 2024 - 9:00PM
Verizon Communications Inc. (NYSE, Nasdaq: VZ) reported
second-quarter 2024 results today with strong wireless service
revenue, broadband subscriber growth, and continued momentum in its
three financial priorities of wireless service revenue,
consolidated adjusted EBITDA and free cash flow. The company
remains on track to achieve its full-year 2024 financial guidance.
“The sequential and year over year improvements in
the second quarter were a reflection of operational excellence and
the moves we made to bring choice, value and control to our
customers’ lives,” said Verizon Chairman and CEO Hans Vestberg.
“Our industry-leading network serves as a catalyst for how our
millions of customers live their lives, and serves as the backbone
for new and emerging technologies. We continue to build and expand
on our strengths and successes with new products and services, and
we are confident that this upward momentum will position us for
future growth."
For second-quarter 2024, Verizon reported earnings
per share of $1.09, compared with earnings per share of $1.10 in
second-quarter 2023. On an adjusted basis2, excluding special
items, EPS was $1.15 in second-quarter 2024, compared with adjusted
EPS2 of $1.21 in second-quarter 2023.
Second-quarter 2024 financial results reflected a
pre-tax loss from special items of $355 million. This included the
amortization of intangible assets related to Tracfone and other
acquisitions of $219 million, and a $136 million charge associated
with a mark-to-market adjustment for pension liabilities.
Consolidated results: Upward momentum in
key areas
- Total consolidated
operating revenue in second-quarter 2024 was $32.8 billion, up 0.6
percent from second-quarter 2023. This growth can be attributed to
an increase in service and other revenue, offset by a decrease in
wireless equipment revenue due to lower upgrade volumes.
- Total wireless
service revenue1 in second-quarter 2024 was $19.8 billion, a
sequential increase of more than $250 million, and an increase of
3.5 percent year over year. This increase was driven primarily by
growth of Consumer wireless service revenue.
- Cash flow from
operations in first-half 2024 totaled $16.6 billion, down from
$18.0 billion in first-half 2023. This decrease was due to
higher cash taxes, and higher interest expense primarily related to
a reduction in capitalized interest, as well as higher interest
rates.
- Capital
expenditures in first-half 2024 were $8.1 billion, compared to
$10.1 billion in first-half 2023. The company has returned to
historic levels of capital intensity.
- The company ended
first-half 2024 with free cash flow2 of $8.5 billion, up from $8.0
billion in first-half 2023.
- Consolidated net
income for second-quarter 2024 was $4.7 billion, down from
consolidated net income of $4.8 billion in second-quarter 2023, and
consolidated adjusted EBITDA2 was $12.3 billion, up from $12.0
billion in second-quarter 2023.
- Verizon's total
unsecured debt as of the end of second-quarter 2024 was
$125.3 billion, a $3.1 billion decrease compared to
first-quarter 2024, and $6.1 billion lower year over year. The
company's net unsecured debt2 at the end of second-quarter 2024 was
$122.8 billion. At the end of second-quarter 2024, Verizon's ratio
of unsecured debt to net income (LTM) was 10.7 times and net
unsecured debt to consolidated adjusted EBITDA ratio2 was 2.5
times.
Verizon Consumer: Revenue up, continued
improvement in postpaid phone net additions
- Total Verizon
Consumer revenue in second-quarter 2024 was $24.9 billion, an
increase of 1.5 percent year over year as gains in service revenue
were partially offset by declines in wireless equipment
revenue.
- Wireless service
revenue in second-quarter 2024 was $16.3 billion, up 3.7 percent
year over year, driven by growth in Consumer wireless postpaid
average revenue per account (ARPA) from pricing actions and
continued fixed wireless adoption.
- Consumer wireless
retail postpaid churn was 1.00 percent in second-quarter 2024, and
wireless retail postpaid phone churn was 0.79 percent.
- In second-quarter
2024, Consumer reported 8,000 wireless retail postpaid phone net
losses, compared with 136,000 wireless retail postpaid phone net
losses in second-quarter 2023.
- Consumer wireless
postpaid phone gross additions of approximately 1.8 million in
second-quarter 2024 represented a 12.0 percent increase year over
year. Excluding the contribution from the company's second number
offering, wireless postpaid phone gross additions grew
approximately 5.0 percent year over year.
- Consumer reported
624,000 wireless retail prepaid net losses in second-quarter 2024.
This result included 410,000 wireless retail prepaid net losses
related to the shutdown of the Affordable Connectivity Program, the
majority of which were in SafeLink Wireless, Verizon's brand
offering access to government-sponsored connectivity benefits and
programs. Wireless retail prepaid net losses, excluding SafeLink,
were 12,000.
- Consumer reported
218,000 fixed wireless net additions and 24,000 Fios Internet net
additions in second-quarter 2024. Consumer Fios revenue was $2.9
billion in second-quarter 2024.
- In second-quarter
2024, Consumer operating income was $7.6 billion, an increase of
3.7 percent year over year, and segment operating income margin was
30.5 percent, an increase from 29.8 percent in second-quarter 2023.
Segment EBITDA2 in second-quarter 2024 was $11.0 billion, an
increase of 4.0 percent year over year. This improvement can be
attributed to service revenue growth and lower upgrade volumes.
Segment EBITDA margin2 in second-quarter 2024 was 44.1 percent, an
increase from 43.1 percent in second-quarter 2023.
Verizon Business: Strong mobility and
broadband growth
- Total Verizon
Business revenue was $7.3 billion in second-quarter 2024, a
decrease of 2.4 percent year over year, as increases in wireless
service revenue were more than offset by decreases in wireline
revenue.
- Business wireless
service revenue in second-quarter 2024 was $3.4 billion, an
increase of 2.4 percent year over year. This result was driven by
continued strong net additions for both mobility and fixed
wireless, as well as benefits from pricing actions implemented in
recent quarters.
- Business reported
268,000 wireless retail postpaid net additions in second-quarter
2024. This included 156,000 postpaid phone net additions, the
highest result since fourth-quarter 2022. The company experienced
sequential improvement in phone net additions across its small and
medium business, enterprise, and public sector customers.
- Business wireless
retail postpaid churn was 1.45 percent in second-quarter 2024, and
wireless retail postpaid phone churn was 1.10 percent.
- Business reported
160,000 fixed wireless net additions in second-quarter 2024, the
highest quarterly result to date.
- In second-quarter
2024, Verizon Business operating income was $500 million, a
decrease of 6.2 percent year over year, and segment operating
income margin was 6.8 percent, a decrease from 7.1 percent in
second-quarter 2023. Segment EBITDA2 in second-quarter 2024 was
$1.6 billion, a decrease of 3.5 percent year over year, driven by
continued declines in wireline revenues. Segment EBITDA margin2 in
second-quarter 2024 was 21.6 percent, a decrease from 21.9 percent
in second-quarter 2023.
Outlook and guidance: Verizon is on track
to meet financial guidance
The company does not provide a reconciliation for
any of the following adjusted (non-GAAP) forecasts because it
cannot, without unreasonable effort, predict the special items that
could arise, and the company is unable to address the probable
significance of the unavailable information.
For 2024, Verizon continues to expect the
following:
- Total wireless
service revenue growth1 of 2.0 percent to 3.5 percent.
- Adjusted EBITDA
growth2 of 1.0 percent to 3.0 percent.
- Adjusted EPS2 of
$4.50 to $4.70.
- Capital
expenditures between $17.0 billion and $17.5 billion.
- Adjusted effective
income tax rate2 in the range of 22.5 percent to 24.0 percent.
1 Total wireless service revenue represents the sum
of Consumer and Business segments.
2 Non-GAAP financial measure. See the accompanying
schedules and www.verizon.com/about/investors for reconciliations
of non-GAAP financial measures cited in this document to most
directly comparable financial measures under generally accepted
accounting principles (GAAP).
Verizon Communications Inc. (NYSE, Nasdaq: VZ)
powers and empowers how its millions of customers live, work and
play, delivering on their demand for mobility, reliable network
connectivity and security. Headquartered in New York City, serving
countries worldwide and nearly all of the Fortune 500, Verizon
generated revenues of $134.0 billion in 2023. Verizon’s world-class
team never stops innovating to meet customers where they are today
and equip them for the needs of tomorrow. For more, visit
verizon.com or find a retail location at verizon.com/stores.
VERIZON’S ONLINE MEDIA CENTER: News releases,
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Forward-looking statementsIn this
communication we have made forward-looking statements. These
statements are based on our estimates and assumptions and are
subject to risks and uncertainties. Forward-looking statements
include the information concerning our possible or assumed future
results of operations. Forward-looking statements also include
those preceded or followed by the words “anticipates,” “assumes,”
“believes,” “estimates,” “expects,” “forecasts,” “hopes,”
“intends,” “plans,” “targets” or similar expressions. For those
statements, we claim the protection of the safe harbor for
forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995. We undertake no obligation to revise
or publicly release the results of any revision to these
forward-looking statements, except as required by law. Given these
risks and uncertainties, readers are cautioned not to place undue
reliance on such forward-looking statements. The following
important factors, along with those discussed in our filings with
the Securities and Exchange Commission (the “SEC”), could affect
future results and could cause those results to differ materially
from those expressed in the forward-looking statements: the effects
of competition in the markets in which we operate, including the
inability to successfully respond to competitive factors such as
prices, promotional incentives and evolving consumer preferences;
failure to take advantage of, or respond to competitors' use of,
developments in technology and address changes in consumer demand;
performance issues or delays in the deployment of our 5G network
resulting in significant costs or a reduction in the anticipated
benefits of the enhancement to our networks; the inability to
implement our business strategy; adverse conditions in the U.S. and
international economies, including inflation and changing interest
rates in the markets in which we operate; cyber attacks impacting
our networks or systems and any resulting financial or reputational
impact; damage to our infrastructure or disruption of our
operations from natural disasters, extreme weather conditions, acts
of war, terrorist attacks or other hostile acts and any resulting
financial or reputational impact; disruption of our key suppliers’
or vendors' provisioning of products or services, including as a
result of geopolitical factors or the potential impacts of global
climate change; material adverse changes in labor matters and any
resulting financial or operational impact; damage to our reputation
or brands; the impact of public health crises on our operations,
our employees and the ways in which our customers use our networks
and other products and services; changes in the regulatory
environment in which we operate, including any increase in
restrictions on our ability to operate our networks or businesses;
allegations regarding the release of hazardous materials or
pollutants into the environment from our, or our predecessors’,
network assets and any related government investigations,
regulatory developments, litigation, penalties and other liability,
remediation and compliance costs, operational impacts or
reputational damage; our high level of indebtedness; significant
litigation and any resulting material expenses incurred in
defending against lawsuits or paying awards or settlements; an
adverse change in the ratings afforded our debt securities by
nationally accredited ratings organizations or adverse conditions
in the credit markets affecting the cost, including interest rates,
and/or availability of further financing; significant increases in
benefit plan costs or lower investment returns on plan assets;
changes in tax laws or regulations, or in their interpretation, or
challenges to our tax positions, resulting in additional tax
expense or liabilities; and changes in accounting assumptions that
regulatory agencies, including the SEC, may require or that result
from changes in the accounting rules or their application, which
could result in an impact on earnings.
Non-GAAP Reconciliations - Consolidated
Verizon
Consolidated EBITDA and Consolidated Adjusted
EBITDA |
(dollars in millions) |
Unaudited |
|
3 Mos. Ended 6/30/24 |
|
3 Mos. Ended 3/31/24 |
|
3 Mos. Ended 12/31/23 |
|
3 Mos. Ended 9/30/23 |
|
3 Mos. Ended 6/30/23 |
|
3 Mos. Ended 3/31/23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Net Income (Loss) |
|
$ |
4,702 |
|
$ |
4,722 |
|
|
$ |
(2,573 |
) |
|
$ |
4,884 |
|
|
$ |
4,766 |
|
|
$ |
5,018 |
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
|
1,332 |
|
|
1,353 |
|
|
|
756 |
|
|
|
1,308 |
|
|
|
1,346 |
|
|
|
1,482 |
|
Interest expense |
|
|
1,698 |
|
|
1,635 |
|
|
|
1,599 |
|
|
|
1,433 |
|
|
|
1,285 |
|
|
|
1,207 |
|
Depreciation and amortization expense(1) |
|
|
4,483 |
|
|
4,445 |
|
|
|
4,516 |
|
|
|
4,431 |
|
|
|
4,359 |
|
|
|
4,318 |
|
Consolidated EBITDA |
|
$ |
12,215 |
|
$ |
12,155 |
|
|
$ |
4,298 |
|
|
$ |
12,056 |
|
|
$ |
11,756 |
|
|
$ |
12,025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add/(subtract): |
|
|
|
|
|
|
|
|
|
|
|
|
Other (income) expense, net(2) |
|
$ |
72 |
|
$ |
(198 |
) |
|
$ |
807 |
|
|
$ |
(170 |
) |
|
$ |
(210 |
) |
|
$ |
(114 |
) |
Equity in (earnings) losses of unconsolidated businesses |
|
|
14 |
|
|
9 |
|
|
|
11 |
|
|
|
18 |
|
|
|
33 |
|
|
|
(9 |
) |
Severance charges |
|
|
— |
|
|
— |
|
|
|
296 |
|
|
|
— |
|
|
|
237 |
|
|
|
— |
|
Legacy legal matter |
|
|
— |
|
|
106 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Verizon Business Group goodwill impairment |
|
|
— |
|
|
— |
|
|
|
5,841 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Asset rationalization |
|
|
— |
|
|
— |
|
|
|
325 |
|
|
|
— |
|
|
|
155 |
|
|
|
— |
|
Legal settlement |
|
|
— |
|
|
— |
|
|
|
100 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Business transformation costs |
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
176 |
|
|
|
— |
|
|
|
— |
|
Non-strategic business shutdown |
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
158 |
|
|
|
— |
|
|
|
— |
|
|
|
|
86 |
|
|
(83 |
) |
|
|
7,380 |
|
|
|
182 |
|
|
|
215 |
|
|
|
(123 |
) |
Consolidated Adjusted EBITDA |
|
$ |
12,301 |
|
$ |
12,072 |
|
|
$ |
11,678 |
|
|
$ |
12,238 |
|
|
$ |
11,971 |
|
|
$ |
11,902 |
|
Footnotes: |
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes Amortization of acquisition-related intangible assets
and a portion of the Non-strategic business shutdown, where
applicable. |
(2) Includes Pension and benefits remeasurement adjustments, where
applicable. |
Consolidated EBITDA and Consolidated Adjusted EBITDA
(LTM) |
(dollars in millions) |
Unaudited |
|
12 Mos. Ended 6/30/24 |
|
12 Mos. Ended 12/31/23 |
|
|
|
|
|
Consolidated Net Income |
|
$ |
11,735 |
|
$ |
12,095 |
Add: |
|
|
|
|
Provision for income taxes |
|
|
4,749 |
|
|
4,892 |
Interest expense |
|
|
6,365 |
|
|
5,524 |
Depreciation and amortization expense(1) |
|
|
17,875 |
|
|
17,624 |
Consolidated EBITDA |
|
$ |
40,724 |
|
$ |
40,135 |
|
|
|
|
|
Add/(subtract): |
|
|
|
|
Other expense, net(2) |
|
$ |
511 |
|
$ |
313 |
Equity in losses of unconsolidated businesses |
|
|
52 |
|
|
53 |
Severance charges |
|
|
296 |
|
|
533 |
Legacy legal matter |
|
|
106 |
|
|
— |
Verizon Business Group goodwill impairment |
|
|
5,841 |
|
|
5,841 |
Asset rationalization |
|
|
325 |
|
|
480 |
Legal settlement |
|
|
100 |
|
|
100 |
Business transformation costs |
|
|
176 |
|
|
176 |
Non-strategic business shutdown |
|
|
158 |
|
|
158 |
|
|
|
7,565 |
|
|
7,654 |
Consolidated Adjusted EBITDA |
|
$ |
48,289 |
|
$ |
47,789 |
|
|
|
|
|
Footnotes: |
(1) Includes Amortization of acquisition-related intangible assets
and a portion of the Non-strategic business shutdown, where
applicable. |
(2) Includes Pension and benefits remeasurement adjustments, where
applicable. |
Net Unsecured Debt and Net Unsecured Debt to Consolidated
Adjusted EBITDA Ratio |
|
|
|
|
(dollars in millions) |
Unaudited |
|
6/30/24 |
|
3/31/24 |
|
12/31/23 |
|
6/30/23 |
|
|
|
|
|
|
|
|
|
Debt maturing within one year |
|
$ |
23,255 |
|
$ |
15,594 |
|
$ |
12,973 |
|
$ |
14,827 |
Long-term debt |
|
|
126,022 |
|
|
136,104 |
|
|
137,701 |
|
|
137,871 |
Total Debt |
|
|
149,277 |
|
|
151,698 |
|
|
150,674 |
|
|
152,698 |
Less Secured debt |
|
|
24,015 |
|
|
23,290 |
|
|
22,183 |
|
|
21,342 |
Unsecured Debt |
|
|
125,262 |
|
|
128,408 |
|
|
128,491 |
|
|
131,356 |
Less Cash and cash equivalents |
|
|
2,432 |
|
|
2,365 |
|
|
2,065 |
|
|
4,803 |
Net Unsecured Debt |
|
$ |
122,830 |
|
$ |
126,043 |
|
$ |
126,426 |
|
$ |
126,553 |
Consolidated Net Income (LTM) |
|
$ |
11,735 |
|
|
|
$ |
12,095 |
|
|
Unsecured Debt to Consolidated Net Income
Ratio |
|
10.7x |
|
|
|
10.6x |
|
|
Consolidated Adjusted EBITDA (LTM) |
|
$ |
48,289 |
|
|
|
$ |
47,789 |
|
|
Net Unsecured Debt to Consolidated Adjusted EBITDA
Ratio |
|
2.5x |
|
|
|
2.6x |
|
|
Adjusted Earnings per Common Share (Adjusted
EPS) |
(dollars in millions, except per share amounts) |
Unaudited |
|
3 Mos. Ended 6/30/24 |
|
3 Mos. Ended 6/30/23 |
|
|
Pre-tax |
Tax |
After-Tax |
|
|
Pre-tax |
Tax |
After-Tax |
|
EPS |
|
|
|
|
$ |
1.09 |
|
|
|
|
$ |
1.10 |
Amortization of acquisition-related intangible assets |
|
$ |
219 |
$ |
(55 |
) |
$ |
164 |
|
0.04 |
|
$ |
206 |
$ |
(53 |
) |
$ |
153 |
|
0.04 |
Severance, pension and benefits charges |
|
|
136 |
|
(34 |
) |
|
102 |
|
0.02 |
|
|
237 |
|
(59 |
) |
|
178 |
|
0.04 |
Asset rationalization |
|
|
— |
|
— |
|
|
— |
|
— |
|
|
155 |
|
(33 |
) |
|
122 |
|
0.03 |
|
|
$ |
355 |
$ |
(89 |
) |
$ |
266 |
$ |
0.06 |
|
$ |
598 |
$ |
(145 |
) |
$ |
453 |
$ |
0.11 |
Adjusted EPS |
|
|
|
|
$ |
1.15 |
|
|
|
|
$ |
1.21 |
Footnote: |
|
|
|
|
|
|
|
|
|
|
Adjusted EPS may not add due to rounding. |
|
|
|
|
|
|
|
|
|
|
Free Cash Flow |
|
|
|
|
(dollars in millions) |
Unaudited |
|
6 Mos. Ended 6/30/24 |
|
6 Mos. Ended 6/30/23 |
|
|
|
|
|
Net Cash Provided by Operating Activities |
|
$ |
16,569 |
|
|
$ |
18,020 |
|
Capital expenditures (including capitalized software) |
|
|
(8,071 |
) |
|
|
(10,070 |
) |
Free Cash Flow |
|
$ |
8,498 |
|
|
$ |
7,950 |
|
Non-GAAP Reconciliations -
Segments
Segment EBITDA and Segment EBITDA Margin |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer |
|
|
|
|
|
|
|
|
(dollars in millions) |
Unaudited |
|
3 Mos. Ended 6/30/24 |
|
3 Mos. Ended 6/30/23 |
|
6 Mos. Ended 6/30/24 |
|
6 Mos. Ended 6/30/23 |
|
|
|
|
|
|
|
|
|
Operating Income |
|
$ |
7,604 |
|
|
$ |
7,330 |
|
|
$ |
14,976 |
|
|
$ |
14,429 |
|
Add Depreciation and amortization expense |
|
|
3,394 |
|
|
|
3,247 |
|
|
|
6,703 |
|
|
|
6,461 |
|
Segment EBITDA |
|
$ |
10,998 |
|
|
$ |
10,577 |
|
|
$ |
21,679 |
|
|
$ |
20,890 |
|
Year over year change % |
|
|
4.0 |
% |
|
|
|
|
3.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
Total operating revenues |
|
$ |
24,927 |
|
|
$ |
24,558 |
|
|
$ |
49,984 |
|
|
$ |
49,415 |
|
Operating Income Margin |
|
|
30.5 |
% |
|
|
29.8 |
% |
|
|
30.0 |
% |
|
|
29.2 |
% |
Segment EBITDA Margin |
|
|
44.1 |
% |
|
|
43.1 |
% |
|
|
43.4 |
% |
|
|
42.3 |
% |
Business |
|
|
|
|
|
|
|
|
(dollars in millions) |
Unaudited |
|
3 Mos. Ended 6/30/24 |
|
3 Mos. Ended 6/30/23 |
|
6 Mos. Ended 6/30/24 |
|
6 Mos. Ended 6/30/23 |
|
|
|
|
|
|
|
|
|
Operating Income |
|
$ |
500 |
|
|
$ |
533 |
|
|
$ |
899 |
|
|
$ |
1,084 |
|
Add Depreciation and amortization expense |
|
|
1,078 |
|
|
|
1,103 |
|
|
|
2,206 |
|
|
|
2,197 |
|
Segment EBITDA |
|
$ |
1,578 |
|
|
$ |
1,636 |
|
|
$ |
3,105 |
|
|
$ |
3,281 |
|
Year over year change % |
|
(3.5 |
)% |
|
|
|
(5.4 |
)% |
|
|
|
|
|
|
|
|
|
|
|
Total operating revenues |
|
$ |
7,300 |
|
|
$ |
7,483 |
|
|
$ |
14,676 |
|
|
$ |
14,977 |
|
Operating Income Margin |
|
|
6.8 |
% |
|
|
7.1 |
% |
|
|
6.1 |
% |
|
|
7.2 |
% |
Segment EBITDA Margin |
|
|
21.6 |
% |
|
|
21.9 |
% |
|
|
21.2 |
% |
|
|
21.9 |
% |
|
Media contacts: |
|
Katie Magnotta |
|
201-602-9235 |
|
katie.magnotta@verizon.com |
|
|
|
Eric Wilkens |
|
201-572-9317 |
|
eric.wilkens@verizon.com |
Verizon Communications (NYSE:VZ)
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Verizon Communications (NYSE:VZ)
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From Jul 2023 to Jul 2024