Verizon's Impressive Q4 Earnings Overview
Verizon Communications Inc (NYSE: VZ) recently announced its fiscal fourth-quarter results, revealing solid performance that exceeded expectations. The telecom giant reported a revenue growth of 1.6% year-over-year, reaching a remarkable $35.70 billion, surpassing the analyst consensus estimate of $35.32 billion. Additionally, the adjusted earnings per share (EPS) stood at $1.10, aligning perfectly with analyst forecasts.
Wireless Revenue Growth Driving Success
Verizon's total wireless service revenue was a highlight, amounting to $20.0 billion, representing a 3.1% increase year-over-year. This growth can be attributed to strategic pricing actions and a notable expansion in fixed wireless connections.
Subscriber Additions at Record Levels
The quarter saw Verizon adding approximately 1 million postpaid mobile and broadband subscribers, marking its best quarterly performance in over ten years. Specifically, Verizon recorded net additions of 568,000 postpaid phone subscribers, which is an improvement from 449,000 a year ago. The Verizon Business segment also made significant gains, with retail postpaid net additions reaching 283,000.
Broadband Growth and Future Targets
The broadband segment showcased steady growth as well, with a total of 408,000 broadband net additions this quarter, compared to 350,000 year-over-year. By the end of the quarter, Verizon boasted over 12.3 million broadband subscribers, reflecting a substantial 15% growth from the previous year.
Fixed Wireless Subscriber Surge
As the numbers indicate, at the close of the quarter, Verizon had nearly 4.6 million fixed wireless subscribers, with total net additions in this category reaching 373,000. The company is now well-positioned to meet its ambitious target of achieving between 8 to 9 million fixed wireless access subscribers by 2028.
Business Segment Performance
On the business front, total revenues for Verizon Business hit $7.5 billion, although this represented a decrease of 1.5% year-over-year. In contrast, total revenues for the Verizon Consumer segment climbed 2.2% year-over-year, reaching $27.6 billion. The consumer wireless retail postpaid churn rate was registered at 1.12%, with the wireless retail postpaid phone churn rate slightly better at 0.89%.
Financials and Future Outlook
Verizon's net income for this quarter stood at an impressive $5.1 billion, a significant turnaround from a net loss of $(2.6) billion during the previous year. Furthermore, the consumer segment's EBITDA margin experienced a decline of 100 basis points to 37.5%, while there was a noteworthy 100 basis point increase in the business segment's EBITDA margin, now at 22.1%.
Adjustments to EBITDA and Free Cash Flow
The company’s adjusted EBITDA reached $11.9 billion, an increase from $11.7 billion year-over-year, largely driven by growth in wireless service revenue. This increase was partially offset, however, by higher upgrade volumes and ongoing declines in business wireline revenue. Verizon's free cash flow for the year was reported at $19.8 billion, up from $18.7 billion a year earlier.
Looking Ahead to 2025
Looking forward, Verizon anticipates a wireless service revenue growth ranging from 2.0% to 2.8% for 2025. The company estimates an adjusted EPS of between $4.59 and $4.73, which aligns closely with market expectations. In terms of cash flow, Verizon projects between $17.5 billion and $18.5 billion in free cash flow, alongside operating cash flow expectations of $35 billion to $37 billion and capital expenditures in the same range.
Current Stock Outlook
As of the latest checks, VZ stock saw a slight increase of 0.05%, trading at $39.20 in premarket conditions. This consistent performance reflects investor confidence as Verizon strides confidently into the next fiscal year.
Frequently Asked Questions
What were Verizon's total revenues for Q4?
Verizon reported total revenues of $35.70 billion for the fourth quarter, marking a 1.6% year-over-year growth.
How many subscribers did Verizon add in the last quarter?
Verizon added approximately 1 million postpaid mobile and broadband subscribers during the quarter, the company’s best performance in over a decade.
What is Verizon's forecast for wireless service revenue growth?
For fiscal year 2025, Verizon expects wireless service revenue growth to be between 2.0% and 2.8%.
What was the net income reported by Verizon?
Verizon's net income for the quarter was $5.1 billion, a significant improvement from a loss of $(2.6) billion in the prior year.
What segments contributed to Verizon's revenue?
The revenue came from two main segments: Verizon Consumer, which rose by 2.2% year-over-year to $27.6 billion, and Verizon Business, which saw a decrease of 1.5% to $7.5 billion.
