Verizon Communications Inc (VZ) Q3 2024 Earnings Call Highlights: Record EBITDA and Strategic ...

GuruFocus News
3 min read

In This Article:

  • Wireless Service Revenue Growth: 2.7% increase in the third quarter.

  • Adjusted EBITDA: $12.5 billion, the highest ever reported by Verizon.

  • Cash Flow: $6 billion generated in the quarter.

  • Postpaid Net Adds: 239,000 net additions in the quarter.

  • Prepaid Net Adds: Positive 80,000 net additions, excluding SafeLink.

  • Broadband Subscribers: Nearly 12 million total, with 389,000 net additions in the quarter.

  • Fixed Wireless Access Revenue: Over $550 million per quarter.

  • Capital Expenditures Guidance for 2025: $17.5 billion to $18.5 billion.

  • Free Cash Flow Year-to-Date: $14.5 billion.

  • Dividend Increase: Raised for the 18th consecutive year.

  • Unsecured Leverage Ratio: 2.50 times net unsecured debt to adjusted EBITDA.

Release Date: October 22, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Verizon Communications Inc (NYSE:VZ) reported the highest-ever adjusted EBITDA of $12.5 billion in the third quarter.

  • Wireless service revenue grew by 2.7%, indicating strong performance in the wireless segment.

  • The company achieved its fixed wireless access target 15 months ahead of schedule, reaching 4 million to 5 million subscribers.

  • Verizon Communications Inc (NYSE:VZ) continues to generate strong cash flow, with $6 billion in the quarter.

  • The company is on track with its 2024 guidance, being at or above the midpoint for both wireless service revenue and adjusted EBITDA.

Negative Points

  • Verizon Communications Inc (NYSE:VZ) faces headwinds from promo amortization, impacting financial performance.

  • The company anticipates increased cash taxes, which could affect free cash flow.

  • There are concerns about the sustainability of fixed wireless access growth as the deployment moves to suburban and rural areas with less density.

  • The pending acquisition of Frontier is not expected to be immediately free cash flow positive.

  • Verizon Communications Inc (NYSE:VZ) is facing pressure from some Frontier shareholders to increase the acquisition price.

Q & A Highlights

Q: Simon Flannery from Morgan Stanley asked about Verizon's approach to the BEAD program and how they plan to manage markets with both fixed wireless and fiber. A: Hans Vestberg, CEO, explained that Verizon will pursue BEAD opportunities where it makes sense, particularly in their Fios footprint. He emphasized that their strategy is to deploy C-Band for mobility first, which then creates secondary opportunities for fixed wireless access, providing optionality for customers.

Q: John Hodulik from UBS inquired about the expected growth rate for fixed wireless access and whether Verizon anticipates an acceleration in service revenue growth. A: Hans Vestberg noted that while the growth rate for fixed wireless access might slow due to expansion into suburban and rural areas, the overall strategy remains robust. CFO Anthony Skiadas added that Verizon has taken actions to position for sustained growth, including improvements in volume and pricing, and expects prepaid to turn positive next year.

Recommended Stories