VZ
Verizon Communications INC
NYSE
8-K: Verizon Reports Strong Customer Growth and Profitability in 2024, Exceeding Expectations
Sentiment:
Quarterly Report
24 January 2025 6:55 AM
Verizon announced strong operational and financial results for the fourth quarter and full year 2024, driven by significant customer growth and strategic initiatives.
Better than expected
The company's fourth-quarter results exceeded expectations with strong customer growth and revenue increases.
The full-year EPS of $4.14 was significantly better than the $2.75 reported in the previous year.
The free cash flow of $19.8 billion was better than the $18.7 billion reported in the previous year.
Summary
- Verizon reported strong operational and financial results for the fourth quarter and full year 2024.
- The company added nearly 1 million postpaid mobile and broadband subscribers in the fourth quarter, marking the best quarterly result in over a decade.
- Total wireless service revenue reached $20.0 billion in the fourth quarter, demonstrating industry leadership.
- Full-year 2024 earnings per share (EPS) were $4.14, compared to $2.75 in 2023, while adjusted EPS was $4.59, compared to $4.71 in 2023.
- Total operating revenue for the full year was $134.8 billion, a 0.6 percent increase compared to 2023.
- Full-year free cash flow was $19.8 billion, compared to $18.7 billion in 2023.
- The company's net unsecured debt at the end of the fourth quarter was $113.7 billion.
- Verizon expects total wireless service revenue growth of 2.0 percent to 2.8 percent, adjusted EBITDA growth of 2.0 percent to 3.5 percent, and adjusted EPS growth of 0 to 3.0 percent for 2025.
Sentiment
Score: 8
Explanation: The document presents a positive outlook with strong customer growth, revenue increases, and improved free cash flow. While there are some challenges, the overall tone is optimistic and indicates a healthy financial position.
Positives
- Verizon achieved strong customer growth, adding nearly 1 million postpaid mobile and broadband subscribers in the fourth quarter.
- Wireless service revenue saw significant growth, reaching $20.0 billion in the fourth quarter.
- The company delivered on its 2024 financial guidance, demonstrating strong performance.
- Free cash flow increased to $19.8 billion for the full year 2024.
- Net unsecured debt decreased significantly, indicating improved financial health.
- Verizon is well-positioned to achieve 8 to 9 million fixed wireless access subscribers by 2028.
- Consumer wireless retail postpaid phone net additions showed a strong increase of 34.0 percent year-over-year.
- Business wireless service revenue grew by 3.4 percent year-over-year.
- The company has a strong outlook for 2025 with expected growth in wireless service revenue, adjusted EBITDA, and adjusted EPS.
Negatives
- Full-year 2024 adjusted EPS was $4.59, down from $4.71 in 2023.
- Cash flow from operations decreased slightly to $36.9 billion in 2024 from $37.5 billion in 2023.
- Consumer operating income decreased by 1.9 percent year-over-year in the fourth quarter of 2024.
- Business wireline revenue decreased, offsetting gains in wireless service revenue.
- Consumer segment EBITDA margin decreased to 37.5 percent in the fourth quarter of 2024 from 38.5 percent in the fourth quarter of 2023.
Risks
- The company faces competition in the markets it operates in, which could impact its ability to respond to competitive factors.
- Failure to take advantage of or respond to technological developments, including artificial intelligence, could affect future results.
- Performance issues or delays in the deployment of the 5G network could result in significant costs or reduced benefits.
- Adverse conditions in the U.S. and international economies, including inflation and changing interest rates, could impact the business.
- Cyberattacks could impact networks or systems, resulting in financial or reputational damage.
- Disruptions from natural disasters, extreme weather, acts of war, or terrorist attacks could affect operations.
- Changes in the regulatory environment could increase restrictions on the ability to operate networks or businesses.
- The company's high level of indebtedness poses a risk.
- Significant litigation could result in material expenses.
- Risks associated with mergers, acquisitions, divestitures, and other strategic transactions could impact the company.
Future Outlook
Verizon expects total wireless service revenue growth of 2.0 percent to 2.8 percent, adjusted EBITDA growth of 2.0 percent to 3.5 percent, and adjusted EPS growth of 0 to 3.0 percent for 2025. They also anticipate cash flow from operations of $35.0 billion to $37.0 billion and free cash flow of $17.5 billion to $18.5 billion.
Management Comments
- Verizon Chairman and CEO Hans Vestberg stated that the company is bringing the best experiences to customers through innovations powered by the best network.
- He also mentioned that the company is strengthening Verizon with the pending Frontier acquisition, new satellite partnerships, and ongoing AI enablement.
Industry Context
Verizon's strong performance in customer growth and wireless service revenue highlights its competitive position in the telecommunications industry. The focus on 5G and fixed wireless access aligns with current industry trends, and the company's strategic initiatives, such as the Frontier acquisition, indicate a proactive approach to future growth.
Comparison to Industry Standards
- Verizon's postpaid phone net additions of 568,000 in Q4 2024 is a strong result compared to competitors like AT&T and T-Mobile, who have also been focusing on subscriber growth.
- The 3.1% year-over-year growth in wireless service revenue is a positive indicator, although it is important to compare this to the growth rates of other major players in the industry to fully assess its performance.
- Verizon's free cash flow of $19.8 billion is a solid figure, but it is essential to compare this to the capital expenditure levels and debt obligations of its competitors to understand its relative financial health.
- The company's net unsecured debt to adjusted EBITDA ratio of 2.3x is a key metric to watch, and it should be compared to the industry average and the ratios of its direct competitors to assess its leverage.
- The company's focus on fixed wireless access is a key differentiator, and its ability to reach 8 to 9 million subscribers by 2028 will be a key indicator of its success in this area.
Stakeholder Impact
- Shareholders will benefit from the strong financial results and positive outlook.
- Employees may see job security and growth opportunities due to the company's success.
- Customers will benefit from improved network experiences and new products and services.
- Suppliers and creditors will benefit from the company's financial stability.
Next Steps
- Verizon will continue to focus on growing wireless service revenue, expanding adjusted EBITDA, and generating strong free cash flow.
- The company will continue to integrate the pending Frontier acquisition and explore new satellite partnerships.
- Verizon will continue to invest in AI enablement to enhance and broaden its network.
Key Dates
- January 24, 2025: Date of the report and press release.
Keywords
wireless, broadband, 5G, EBITDA, EPS, revenue, fixed wireless access, postpaid, net additions, free cash flow, debt, telecommunications
VZ
Verizon Communications INC
NYSE
Sector: Communication Services
Filings with Classifications
Worse than expected
7 April 2025 4:06 PM
Proxy Statement
- The 2022-2024 PSU awards vested at 0% due to not meeting performance targets.
Worse than expected
11 March 2025 8:45 AM
8-K Filing
- Verizon expects lower postpaid phone net additions in Q1 2025 due to increased churn and flat to slightly down gross additions.
Worse than expected
12 February 2025 10:19 AM
Annual Results
- The Business segment experienced a revenue decrease of 2.0% due to declines in Enterprise and Public Sector revenues.
- Wireless equipment revenue in the Consumer segment decreased by 5.1%.
Better than expected
24 January 2025 6:55 AM
Quarterly Report
- The company's fourth-quarter results exceeded expectations with strong customer growth and revenue increases.
- The full-year EPS of $4.14 was significantly better than the $2.75 reported in the previous year.
- The free cash flow of $19.8 billion was better than the $18.7 billion reported in the previous year.
Worse than expected
25 October 2024 9:36 AM
Quarterly Report
- Net income attributable to Verizon decreased significantly year-over-year, indicating worse than expected profitability.
- The company incurred a substantial severance charge of $1.7 billion, negatively impacting the bottom line.
Better than expected
22 October 2024 9:14 AM
Strategic Update
- Verizon exceeded its fixed wireless subscriber target 15 months ahead of schedule, indicating better than expected performance.
Worse than expected
22 October 2024 7:00 AM
Quarterly Report
- Consolidated net income decreased year-over-year due to severance charges.
- Earnings per share decreased year-over-year.
- Adjusted EPS decreased year-over-year.
Worse than expected
12 September 2024 10:00 AM
Current Report
- The document details significant charges that will negatively impact the company's financial results for the third quarter of 2024.
Delay expected
9 September 2024 5:24 PM
Merger Announcement
- The closing of the Frontier deal is estimated to take some 18 months.
Better than expected
9 September 2024 5:23 PM
Merger Announcement
- The acquisition is expected to be immediately accretive to revenue and EBITDA, and accretive to EPS and cash flow within a year, indicating better than expected financial outcomes.
Delay expected
5 September 2024 5:18 PM
Merger Announcement
- The transaction is expected to close in approximately 18 months, subject to regulatory approvals and other conditions.
Delay expected
5 September 2024 5:17 PM
Merger Announcement
- The transaction is expected to close in approximately 18 months, subject to regulatory approvals and Frontier shareholder vote.
Better than expected
5 September 2024 6:56 AM
Merger Announcement
- The transaction is expected to be accretive to Verizon's revenue and Adjusted EBITDA growth rates upon closing.
- Verizon expects to realize at least $500 million in run-rate cost synergies by year three.
Delay expected
5 August 2024 4:10 PM
Debt Exchange Offer Announcement
- The early participation date was extended from August 2, 2024 to August 19, 2024.
Worse than expected
25 July 2024 9:52 AM
Quarterly Report
- Net income attributable to Verizon decreased slightly compared to the same period last year.
- Wireless equipment revenues decreased by 6.5% year-over-year, indicating a decline in device sales.
- The company's Business segment saw a decrease in operating revenues of 2.4%.
Worse than expected
25 April 2024 9:00 AM
Quarterly Report
- Net income attributable to Verizon decreased compared to the same period last year, indicating worse than expected results.
Worse than expected
23 January 2024 7:00 AM
Quarterly Report
- The company reported a net loss of $2.6 billion for the fourth quarter, compared to a net income of $6.7 billion in the same period of 2022, primarily due to a $7.8 billion pre-tax loss from special items.
- Full-year 2023 earnings per share (EPS) was $2.75, compared with $5.06 in 2022.
- Adjusted EPS for the fourth quarter was $1.08 compared to $1.19 in the prior year period.
Worse than expected
17 January 2024 8:00 AM
8-K Filing
- The company recorded a significant $5.8 billion goodwill impairment charge, indicating a substantial reduction in the perceived value of the Business unit.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.