Verizon begins 2024 with strong wireless service revenue growth, solid cash flow and continued momentum in broadband
22 Avril 2024 - 1:00PM
Verizon Communications Inc. (NYSE, Nasdaq: VZ) reported
first-quarter 2024 results with strong wireless service revenue,
solid cash flow, adjusted EBITDA expansion and fixed wireless
subscriber base growth.
“Our strong results show that our team is delivering. Our
performance in the first quarter sets us up for a successful 2024,”
said Verizon Chairman and CEO Hans Vestberg. “We are on track to
meet our financial guidance and to deliver positive Consumer
postpaid phone net adds for the year. Our fixed wireless subscriber
base is continuing to grow rapidly, and our network remains the
best in the industry, by far.”
For first-quarter 2024, Verizon reported earnings per share of
$1.09, compared with earnings per share of $1.17 in first-quarter
2023. On an adjusted basis1, excluding special items, EPS was $1.15
in first-quarter 2024, compared with adjusted EPS1 of $1.20 in
first-quarter 2023.
First quarter 2024 financial results reflected a pre-tax loss
from special items of $327 million. This includes the amortization
of intangible assets related to Tracfone and other acquisitions of
$221 million, and a $106 million charge associated with a
litigation matter related to a legacy contract for the production
of telephone directories in Costa Rica by a subsidiary of
Verizon.
Consolidated results: Verizon delivers on three key
metrics: wireless service revenue, adjusted EBITDA and cash
flow
- Total consolidated operating revenue in first-quarter 2024 of
$33.0 billion, up 0.2 percent from first-quarter 2023. The increase
can be attributed to pricing actions implemented in recent
quarters, combined with improved operating results offset by a
decrease in wireless equipment revenue due to lower upgrade
volumes.
- Total wireless service revenue2 in first-quarter 2024 was $19.5
billion, up 3.3 percent year over year, driven primarily by pricing
actions implemented in recent quarters, higher premium price plan
adoption, and growth of our fixed wireless subscriber base.
- Cash flow from operations totaled $7.1 billion in first-quarter
2024, down from $8.3 billion in first-quarter 2023.
- First-quarter 2024 capital expenditures were $4.4 billion,
compared to $6.0 billion in first-quarter 2023.
- The company ended first-quarter 2024 with free cash flow1 of
$2.7 billion, up from $2.3 billion in first-quarter 2023.
- Consolidated net income for first-quarter 2024 was $4.7
billion, compared to consolidated net income of $5.0 billion in
first-quarter 2023, and consolidated adjusted EBITDA1 was $12.1
billion, up from $11.9 billion in first-quarter 2023.
- Verizon's total unsecured debt as of the end of first-quarter
2024 was $128.4 billion, a $0.1 billion decrease compared to
fourth-quarter 2023, and $3.6 billion lower year over year. The
company's net unsecured debt1 at the end of first-quarter 2024 was
$126.0 billion. At the end of first-quarter 2024, Verizon's ratio
of unsecured debt to net income (LTM) was 10.9 times and net
unsecured debt to consolidated adjusted EBITDA ratio1 was 2.6
times.
Verizon Consumer
- Total Verizon Consumer revenue in first-quarter 2024 was $25.1
billion, an increase of 0.8 percent year over year as gains in
service revenue were partially offset by declines in wireless
equipment revenue.
- Wireless service revenue in first-quarter 2024 was $16.1
billion, up 3.4 percent year over year, driven by growth in
Consumer wireless postpaid average revenue per account (ARPA) from
pricing actions and continued FWA adoption.
- Consumer wireless retail postpaid churn was 1.03 percent in
first-quarter 2024, and wireless retail postpaid phone churn was
0.83 percent.
- In first-quarter 2024, Consumer reported 158,000 wireless
retail postpaid phone net losses, representing an improvement of
105,000 from first-quarter 2023 net losses of 263,000, driven by
improvements in both gross adds and churn. This represents Verizon
Consumer's best first-quarter performance since 2018.
- Consumer postpaid phone gross additions in first-quarter 2024
increased 5.3 percent year over year, driven by the continued
success of myPlan and last year's go to market improvements.
- Consumer reported 216,000 wireless retail prepaid net losses in
first-quarter 2024. Wireless retail prepaid net losses excluding
SafeLink Wireless, Verizon's brand offering access to
government-sponsored connectivity benefits and programs, were
131,000.
- Consumer reported 203,000 fixed wireless net additions and
49,000 Fios Internet net additions in first-quarter 2024. Consumer
Fios revenue was $2.9 billion in first-quarter 2024.
- In first-quarter 2024, Consumer operating income was $7.4
billion, an increase of 3.8 percent year over year, and segment
operating income margin was 29.4 percent, an increase from 28.6
percent in first-quarter 2023. Segment EBITDA1 in first-quarter
2024 was $10.7 billion, an increase of 3.6 percent year over year.
This improvement can be attributed to wireless service revenue
growth and lower upgrade volumes. Segment EBITDA margin1 in
first-quarter 2024 was 42.6 percent, an increase from 41.5 percent
in first-quarter 2023.
Verizon Business
- Total Verizon Business revenue was $7.4 billion in
first-quarter 2024, a decrease of 1.6 percent year over year, as
increases in wireless service revenue were more than offset by
decreases in wireline revenue and wireless equipment revenue.
- Business wireless service revenue in first-quarter 2024 was
$3.4 billion, an increase of 2.7 percent year over year. This was
driven by continued strong net additions in the quarter for both
mobility and fixed wireless, as well as benefits from pricing
actions implemented in recent quarters.
- Business reported 178,000 wireless retail postpaid net
additions in first-quarter 2024, including 90,000 postpaid phone
net additions.
- Business wireless retail postpaid churn was 1.51 percent in
first-quarter 2024, and wireless retail postpaid phone churn was
1.13 percent.
- Business reported 151,000 fixed wireless net additions in
first-quarter 2024, representing a 10.2 percent increase from
first-quarter 2023. This marked their best quarterly result to
date.
- In first-quarter 2024, Verizon Business operating income was
$399 million, a decrease of 27.6 percent year over year, and
segment operating income margin was 5.4 percent, a decrease from
7.4 percent in first-quarter 2023. Segment EBITDA1 in first-quarter
2024 was $1.5 billion, a decrease of 7.2 percent year over year,
driven by wireline revenue declines. Segment EBITDA margin1 in
first-quarter 2024 was 20.7 percent, a decrease from 22.0 percent
in first-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 growth2 of 2.0 percent to 3.5
percent.
- Adjusted EBITDA growth1 of 1.0 percent to 3.0 percent.
- Adjusted EPS1 of $4.50 to $4.70.
- Capital expenditures between $17.0 billion and $17.5
billion.
- Adjusted effective income tax rate1 in the range of 22.5
percent to 24.0 percent.
1 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).
2 Total wireless service revenue represents the sum of Consumer
and Business segments.
Verizon Communications Inc. (NYSE, Nasdaq: VZ) was formed in
2000 and is one of the world’s leading providers of technology and
communications services. Headquartered in New York City and with a
presence around the world, Verizon generated revenues of $134.0
billion in 2023. The company offers data, video and voice services
and solutions on its award-winning networks and platforms,
delivering on customers’ demand for mobility, reliable network
connectivity, and security.
VERIZON’S ONLINE MEDIA CENTER: News releases, stories, media
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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 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) |
|
$ |
4,722 |
|
|
$ |
(2,573 |
) |
|
$ |
4,884 |
|
|
$ |
4,766 |
|
|
$ |
5,018 |
|
Add: |
|
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
|
1,353 |
|
|
|
756 |
|
|
|
1,308 |
|
|
|
1,346 |
|
|
|
1,482 |
|
Interest expense |
|
|
1,635 |
|
|
|
1,599 |
|
|
|
1,433 |
|
|
|
1,285 |
|
|
|
1,207 |
|
Depreciation and amortization expense(1) |
|
|
4,445 |
|
|
|
4,516 |
|
|
|
4,431 |
|
|
|
4,359 |
|
|
|
4,318 |
|
Consolidated EBITDA |
|
$ |
12,155 |
|
|
$ |
4,298 |
|
|
$ |
12,056 |
|
|
$ |
11,756 |
|
|
$ |
12,025 |
|
|
|
|
|
|
|
|
|
|
|
|
Add/(subtract): |
|
|
|
|
|
|
|
|
|
|
Other (income) expense, net(2) |
|
$ |
(198 |
) |
|
$ |
807 |
|
|
$ |
(170 |
) |
|
$ |
(210 |
) |
|
$ |
(114 |
) |
Equity in losses (earnings) of unconsolidated businesses |
|
|
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 |
|
|
|
— |
|
|
|
— |
|
|
|
|
(83 |
) |
|
|
7,380 |
|
|
|
182 |
|
|
|
215 |
|
|
|
(123 |
) |
Consolidated Adjusted EBITDA |
|
$ |
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 3/31/24 |
|
12 Mos. Ended 12/31/23 |
|
|
|
|
|
Consolidated Net Income |
|
$ |
11,799 |
|
$ |
12,095 |
Add: |
|
|
|
|
Provision for income taxes |
|
|
4,763 |
|
|
4,892 |
Interest expense |
|
|
5,952 |
|
|
5,524 |
Depreciation and amortization expense(1) |
|
|
17,751 |
|
|
17,624 |
Consolidated EBITDA |
|
$ |
40,265 |
|
$ |
40,135 |
|
|
|
|
|
Add/(subtract): |
|
|
|
|
Other expense, net(2) |
|
$ |
229 |
|
$ |
313 |
Equity in losses of unconsolidated businesses |
|
|
71 |
|
|
53 |
Severance charges |
|
|
533 |
|
|
533 |
Legacy legal matter |
|
|
106 |
|
|
— |
Verizon Business Group goodwill impairment |
|
|
5,841 |
|
|
5,841 |
Asset rationalization |
|
|
480 |
|
|
480 |
Legal settlement |
|
|
100 |
|
|
100 |
Business transformation costs |
|
|
176 |
|
|
176 |
Non-strategic business shutdown |
|
|
158 |
|
|
158 |
|
|
|
7,694 |
|
|
7,654 |
Consolidated Adjusted EBITDA |
|
$ |
47,959 |
|
$ |
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 |
|
3/31/24 |
|
12/31/23 |
|
3/31/23 |
|
|
|
|
|
|
|
Debt maturing within one year |
|
$ |
15,594 |
|
$ |
12,973 |
|
$ |
12,081 |
Long-term debt |
|
|
136,104 |
|
|
137,701 |
|
|
140,772 |
Total Debt |
|
|
151,698 |
|
|
150,674 |
|
|
152,853 |
Less Secured debt |
|
|
23,290 |
|
|
22,183 |
|
|
20,835 |
Unsecured Debt |
|
|
128,408 |
|
|
128,491 |
|
|
132,018 |
Less Cash and cash equivalents |
|
|
2,365 |
|
|
2,065 |
|
|
2,234 |
Net Unsecured
Debt |
|
$ |
126,043 |
|
$ |
126,426 |
|
$ |
129,784 |
Consolidated Net Income (LTM) |
|
$ |
11,799 |
|
$ |
12,095 |
|
|
Unsecured Debt to Consolidated Net Income
Ratio |
|
10.9x |
|
10.6x |
|
|
Consolidated Adjusted EBITDA (LTM) |
|
$ |
47,959 |
|
$ |
47,789 |
|
|
Net Unsecured Debt to Consolidated Adjusted EBITDA
Ratio |
|
2.6x |
|
2.6x |
|
|
Adjusted Earnings per Common Share (Adjusted
EPS) |
|
|
|
|
|
|
|
|
(dollars in millions, except per share amounts) |
Unaudited |
|
3 Mos. Ended 3/31/24 |
|
3 Mos. Ended 3/31/23 |
|
|
Pre-tax |
Tax |
After-Tax |
|
|
Pre-tax |
Tax |
After-Tax |
|
EPS |
|
|
|
|
$ |
1.09 |
|
|
|
|
$ |
1.17 |
Amortization of acquisition-related intangible assets |
|
$ |
221 |
$ |
(56 |
) |
$ |
165 |
|
0.04 |
|
$ |
208 |
$ |
(53 |
) |
$ |
155 |
|
0.04 |
Legacy legal matter |
|
|
106 |
|
(27 |
) |
|
79 |
|
0.02 |
|
|
— |
|
— |
|
|
— |
|
— |
|
|
$ |
327 |
$ |
(83 |
) |
$ |
244 |
$ |
0.06 |
|
$ |
208 |
$ |
(53 |
) |
$ |
155 |
$ |
0.04 |
Adjusted EPS |
|
|
|
|
$ |
1.15 |
|
|
|
|
$ |
1.20 |
Footnote: |
|
|
|
|
|
|
|
|
|
|
Adjusted EPS may not add due to rounding. |
|
|
|
|
|
|
|
|
|
|
Free Cash Flow |
|
|
|
|
|
|
|
|
|
|
(dollars in millions) |
|
Unaudited |
|
3 Mos. Ended 3/31/24 |
|
|
3 Mos. Ended3/31/23 |
|
|
|
|
|
|
Net Cash Provided by Operating Activities |
|
$ |
7,084 |
|
|
$ |
8,289 |
|
Capital expenditures (including capitalized software) |
|
|
(4,376 |
) |
|
|
(5,958 |
) |
Free Cash Flow |
|
$ |
2,708 |
|
|
$ |
2,331 |
|
Non-GAAP Reconciliations - Segments |
|
|
|
|
Segment EBITDA and Segment EBITDA Margin |
|
|
|
|
|
|
|
|
|
Consumer |
|
|
|
|
|
|
|
|
|
|
(dollars in millions) |
|
Unaudited |
|
3 Mos. Ended3/31/24 |
|
|
3 Mos. Ended3/31/23 |
|
|
|
|
|
|
Operating Income |
|
$ |
7,372 |
|
|
$ |
7,099 |
|
Add Depreciation and amortization expense |
|
|
3,309 |
|
|
|
3,214 |
|
Segment EBITDA |
|
$ |
10,681 |
|
|
$ |
10,313 |
|
Year over year change % |
|
|
3.6 |
% |
|
|
|
|
|
|
|
Total operating revenues |
|
$ |
25,057 |
|
|
$ |
24,857 |
|
Operating Income Margin |
|
|
29.4 |
% |
|
|
28.6 |
% |
Segment EBITDA Margin |
|
|
42.6 |
% |
|
|
41.5 |
% |
Business |
|
|
|
|
|
|
|
|
|
|
(dollars in millions) |
|
Unaudited |
|
3 Mos. Ended 3/31/24 |
|
|
3 Mos. Ended 3/31/23 |
|
|
|
|
|
|
Operating Income |
|
$ |
399 |
|
|
$ |
551 |
|
Add Depreciation and amortization expense |
|
|
1,128 |
|
|
|
1,094 |
|
Segment EBITDA |
|
$ |
1,527 |
|
|
$ |
1,645 |
|
Year over year change % |
|
(7.2 |
)% |
|
|
|
|
|
|
|
Total operating revenues |
|
$ |
7,376 |
|
|
$ |
7,494 |
|
Operating Income Margin |
|
|
5.4 |
% |
|
|
7.4 |
% |
Segment EBITDA Margin |
|
|
20.7 |
% |
|
|
22.0 |
% |
Media
contact: |
Katie Magnotta |
201-602-9235 |
katie.magnotta@verizon.com |
|
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