VZ - Earnings call transcript Q4 2019 | Verizon Communications Inc.

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Operator

Good morning, and welcome to the Verizon Fourth Quarter 2019 Earnings Conference Call. At this time, all participants have been pleased in a listen-only mode, and the floor will be open for questions following the presentation. [Operator Instructions] Today's conference is being recorded.

If you have any objections, you may disconnect at this time.

It is now my pleasure to turn the call over to your host, Mr. President, Vice Senior Connor, Investor Relations. Brady

Brady Connor

Hans Good earnings conference Brad. here Officer. our Executive morning, Chief Ellis, Connor, and quarter fourth with Officer, Chief and our to Chairman and call. Financial I'm Matt our welcome and Thanks, Vestberg; This Brady is

presentation website. will reminder, a website. A on transcript this call the replay be release, available made on our operating information financial and As are and our also available earnings and our slides Investor Relations of

to like Harbor forward-looking I'd and which Verizon's in your future attention X. started, in uncertainties. Safe get the we that with contains and filings events draw to our risks affect and results our expected Discussion Statement Information is are available Before to financial are SEC, on results future slide of contained on subject may website. statements factors this presentation about that

in most our on rates unless to our sequential. This are GAAP measures presentation non-GAAP these slides disclosed contains measures included financial year-over-year a noted certain on of remarks otherwise non-GAAP directly during as quarterly and growth comparable Reconciliations presentation website. The measures. the materials the formal in financial basis, are our posted

be on webcasting City our will posted hosting to Verizon information the and More New about website. by In addition on IR an event the be in February Hans and XX, Day comments presentations today, Investor our be will York will leadership team.

our a millimeter in of be so the millimeter we're or to will reminder middle holdings strategy. wave able current spectrum a on wave not As we spectrum comment auction

include of per mark-to-market goodwill a of extinguishment net per impairment primarily full pre-tax year. within charge $XXX to from the early year $X.X full for earnings of billion we share earnings of approximately Now OPEB charge and an related resulting loss write-down GAAP a fourth In related quarter and reported and liabilities at in net let's quarter, to take our consolidated business; debt look of Reported a items million and quarter pension on $X.XX $XXX $X.X fourth of a charge of for annual the special our share basis. including media $X.XX fourth billion; an earnings the earnings million. severance

we to In sale of benefit sale a of recorded $X.X related be benefit tax billion tax the addition, will a foreign shares the in cash XXXX. The realized related preferred affiliate. in to impact this

the share year effects to $X.XX X.X% share Excluding quarter was these in per year up was to of the ago. adjusted up per compared earnings $X.XX X.X% earnings Full ago. year items fourth special a compared adjusted $X.XX a $X.XX

Let's of adoption slide earnings revenue at and take now to accounting to quarter profile. look fourth impacts throughout leases for XXXX. XXX ASC a continued XXX earnings move The recognition standards our closer from ASC and X for the

share and illustrated in commission throughout a we benefit compared As year a XXX earnings previous prior adjusted of ASC The the we lesser deferral both from primarily year-over-year in will per XXXX realized per reported realized to which to to the benefit quarters due of headwind continue of creates the reduction share expense. earnings adoption the XXXX.

$X.XX was for impact year. The the and the fourth quarter full for $X.XX

from be deferral expense of we $X.XX. approximately the headwinds expect XXXX, commission For the to

on standard operating XXXX results accounting to addition was all a leases. for balance of In implemented in which XXX, for the at beginning ASC up the ASC XXX sheet leases gross

standard from in per $X.XX standard quarter headwind the to of year-over-year of earnings XXXX. share in leasing a the full not expect $X.XX creating and affects the the upfront our new This year. expensing costs fourth lease certain due for impact We a lease primarily do

expense and impacts on growth business, the partially of underlying strong of of reflects adoption leasing of performance EPS adjusted Full year offset the X.X% commission earnings the slide by the illustrated the of the standard. waterfall deferral

of in later this details call. performance will our Matt Additional by covered be quarterly

take XXXX. recap Hans that, call to over through you strategic the a for priorities turn of I'll discussion XXXX now With to of and our a

Hans Vestberg

and earnings you, fourth call. everyone, Brady, this for quarter Thank joining thank you,

Let a lot done great building and XXXX. all course, on have little that in built during we go-to-market our transformation talent changes, a process a doing quickly new coming also everything XXXX, me summarize we’re XXXX. team, is network, brand bit changes, was The for which into of fundamental a changes of

of teams. our way management architecture. better new change the changes market and that in We We including rebranded a accessing new an with the big company. in fortified a go-to-market, way program. one we're the new our XXXX. We've had company a put brand in lot We doing voluntary of process That network has been everything solidifying with a made is even for

all So on continue we well execute actually happening, day-to-day business. that's to our

network just continues We market. the Our Very is the market. best network the network, to new the that up our that again team in be happy had that XG they J.D. the Power, best clearly with our from keep in RootMetrics confirmation work.

on other for offering, continue we're course in And that customer that wireless came The consumers. and to side we cable the very to comes of seeing here been seeing when Dunne also a Ronan optionality, with lead Unlimited pacing. the year. match earlier the continue have new optionality out his market getting is with our thing came team out but good focused and offerings this mix on we to within with that and wireless it

course, with and as for a lately, have added them And Verizon. for has forward. for service partnership our both the of we also been and to we we a strategy customers, is our the We Both network this of a We win-win now have as partners, strategy. lot Disney+. more want in added included Music in going of Apple

of side, same the partnerships business a also the On we important where we lot model. did had

that with we compute, market the a have the on again, Amazon think a mobile of been AWS for about way new into. not I example accessing XG totally partnership edge

first XX. we the XG, launch speaking And Chicago We with to XG XX we're launch December. edge We compute. the that made we're going said said Home that mobile and XG did standard. cities. We in about in going had NR commitment We our did to we

year it year-over-year. execution report has that a we So with do. with our to what all-in-all, we round year-end year continue want working so same growth And XX% new how had that, achieve we again, I'm to much been happy a is the our when since financials to XXXX in time team best with really net of to and our that adds, model. we up metrics. a at operational phone And comes the

to wireless that profitability, with year a full when highest we over good is side, for the on our the see since service And revenue we the had it financial to X.X% the And which continue XXXX. comes year, see EPS flexibility giving on up And to for going XXXX full forward of us within create our we strong our is can year. continue we was which execute the the strategy. cash course, X.X% that to flow,

they're the as in a processes, wireline in it of investing the group area. the consumer with very Verizon continued structures. secular everything same we're year side, in good The doing. group have business decline comes We're that time tools and investing Ultimately, have the when more XXXX to in at to course headwinds

And on for Verizon our opportunities important, because how cost need put we I is the And revenue also the the offering the XG that actually is many in to structure comes that execute to I side. the so of business and for we what And to place and we're because order XXXX, why one that It's on. when large them in fiber to that's it met so you strong really address for greatest work but important? this can XG. market. focused on we during both corporations growth now it side, But actually us, with, for group is can tell so comes when

And our very Ultimately, going we all, grow fundamental for you to network about to think strong priorities as we we'll to best our of I our be year this XXXX. this a XXXX, business. have first businesses to including and if XXXX think building on network grow I can XG that mean, in and continue we the the continue well, for do core market. core created into in showed continue

our on new leveraging I and later think have Day that focus have seeing that later we're on the a market we that start we and we're February. lot building And customer. build continue our year, on this building our leveraging how and to can Investor XG We're with we doing our assets when that that XG, in XG of see is will building. in to an come back what We're XG we Secondly will fiber. we'll

continue accelerate have important, because revenue to strategy. the the CapEx our we it's XXXX the financials and in did going the and our in very XXXX, strong EPS to and on priority and is discipline this in really execute So driving flow to discipline and also in us ambition being XXXX. able is cash our But around in to growth efficiency That's to OpEx forward continue as third create there. And spend. is our

centricity our priorities the company, our have company purpose-driven genes to very every our customers in the the employees it's stakeholders, that four to And customer or around and important are engage society, our in all both if with day. our

just them drive that. in a continue Here we will giving will as the customers, we around do optionality about thinking did we lot XXXX, to

out our want a drive strategy. of that we a of society to more strengthening And will when responsibility, our our with do laid for lot think all to comes And company our things in combine it as our that stakeholders. is to us create ultimately what value we even a all stakeholders. responsible and business, our responsibility XXXX to We

think good we really coming platform into I all-in-all, So a XXXX. have

excited that and for well. all are you as We are we XXXX excited it, of hope for

So to Matt. by over that, hand I

Matt Ellis

Hans, Thank everyone. good and morning, you,

review $XX.X up will operating operating the of consolidated consolidated revenue financial quarter, In begin was with fourth X.X%. We a results. and our billion,

and by our wireline Service wireless driver business segment. of partially our in lower primary the revenue and remains growth access, equipment in step-ups driven And services, from volumes in predominantly by declines secular products revenue. offset revenue

revenue low XXXX. revenue for beginning year, At the single-digit the of growth provided guidance we consolidated of percentage

For X.X% decline, X.X% revenue grew equipment the in revenue. a wireless including year, total

Adjusted a EBITDA point earlier million, lowered And of year. commission EBITDA as $XX.X by standard approximately margin the billion accounting $XXX compared on The EBITDA quarter. was the $XX.X impact last lease expense. is mentioned to the basis XX in which from billion, headwinds deferral

reflect wireline results margin in despite portion continued business secular volumes. weakness the These segment. in increase of And a in performance meaningful strong consumer, the

And consolidated and overshadowed year the our billion. commission $XX.X headwinds margin lease improved the from year's year included margin EBITDA of of expense, points, deferral of Full EBITDA adjusted adjusted operational lower basis which was XXXX. Full performance approximately standard XX.X%, XX slightly totaled EBITDA last accounting XX.X%. than in

on are goal and we Through our program, cash of savings billion XXXX. cash savings have $XX of billion to cumulative Excellence achieve by cumulative track our Business realized $X.X of

The in at Voluntary Separation two have last expense Program savings our And for savings run resulted billion of of full been this the approximately of rate year. the quarters we year. $X.X

EPS low related to single-digit year of the achieved rate Adjusted XXX ASC up $X.XX, X.X%, and fourth ASC $X.XX, of growth was adjusted mentioned XXX, full a by for from of quarter Brady that including our year yearly the ago. EPS We $X.XX goal representing a growth headwind a XXXX earlier. X.X% posting $X.XX

investing allowed year to XXth networks, now focus dividend the We X. XXXX, the our straight increasing cash which on our sheet. our on turn and to balance cash slide continue us strengthen flows had flow Let's results for in strong in

improvements in to and And benefit tax increase operational Program. discretionary CFFO payments. the to related partially year-over-year Separation contributions, payments higher Voluntary was The cash lower by due offset employee

network. And primarily expenditures the billion Capital for year $XX for of in $XX range billion. totaled driven XX-plus our by within outside footprint the well to XXXX of Ultra build-out our billion. Wideband XG our ILEC our $XX.X and deployment fiber Capital of was spending guided markets,

and Additionally, billion LTE data video year on the up, upgrade XG industry-leading Network and cash year-over-year. was flow architecture. we Free continue to our support traffic, X.X% $XX.X growth Intelligent network Edge to our in the for

to $X.X year-over-year. with continued unsecured net strengthen sheet balance down debt our Our billion

targeted times. to down X.X X.X debt to range Our versus EBITDA times our to net times adjusted rounds of unsecured X.XX ratio

footprint reducing focused into our portfolio funding on overall secured our lower remain near-term capital. continuing and optimize to actively We manage of our targeted range, debt cost our while maturities, our

liability quarter. throughout reduce of in interest part our we transactions year of will the conducted As forward. sheet, going the management expense the this And which balance management

Now, starting review segment our Consumer X. let's results, with operating slide on

momentum. the Competitive strong quarter, pricing, the with quarter fourth the Amida season. the attractive match entered segment Consumer promotions, fourth of Our new and [ph] holiday drove combination new award-winning partnership continued device our network The Disney+ in success mix and

early the bring to on company, with to greater Disney+ and even partner unlimited our uptake extremely brand are an iconic to and with customers. value We pleased the content ability consumer

were year-over-year. competitive fourth activity adds of a were expectations churn And gross a ago, postpaid XX.X% elevated our X.XX% Phone up up year-over-year. adds fund points quarter from XXX,XXX, six consistent net result, across with As basis and industry. the phone the year X.X% up reflecting was

of prior phones. our postpaid provided activations year X.X at including additions Total postpaid million, flat from were this breakdown A million slide. is on net device X.X

upgrade retail rate Our X.X%, the of X.X% ago, postpaid a from was the handset elongation down reflecting cycle. continued upgrade year

were Fios net XX,XXX up year-over-year. Internet additions and of sequentially down

Match totaled on our and broadband such choices and for customers Disney+. this pay Video Fios multiple with Earlier high-quality as launched the only the in providing opportunity they losses paired transparency want. value YouTube the see XX,XXX. TV for offering, services we to with customers TV, choice, Fios, video, month for net & quarter Our Mix Fios

to move to financial XX discuss let's performance. the consumer slide Now,

to updated declines and continue revenues modest offset operating through copper-based offerings wireline We declines in revenue in growth service by which services. equipment Fios in consumer were see and in ongoing our wireless wireless

operating and the billion $XX.X for $XX.X Consumer X.X% respectively. fourth up billion, X.X% quarter and were were were year which the for revenues full

add are service wireless to tools as We and to in pricing revenue such utilizing ARPA. further drive value and partnerships proposition and increases our

connected value the new consume of to being best devices. order recognize network in services Customers operate or their to

higher require additional plans plans connections plans, from increasing step-ups seek As step-ups unlimited within to per and account. we to customers unlimited meter drive to data, tier

quarter billion, a the billion $XX.X the year. for increase for was X.X% revenue service $XX.X wireless and Consumer full

subscriber is our still compete in continued of plans. see from to as meter We marketplace growth, the customer unlimited, on to expect we further approximately to continue effectively and data migrations XX% base as

gross upgrade the the from decreased lower offset equipment increase wireless more and than In promotional phone pressure X.X%, fourth quarter, adds. as offerings revenue Consumer volumes in

Fios the primarily X.X%, equipment primarily remained offsetting demand revenue subscribers. year, flat, video broadband full our decreased Consumer For relatively reductions of revenue by impact due lower the offerings driven for the upgrade volumes. to in

EBITDA lease the the margin the commission was accounting points and of segment from XXX points including in year, basis deferral Consumer headwinds standard. last approximately of basis XX.X% expense XX quarter, down from

strong including while For the customer consumer XX margins. that full continuing to approximately year, of XX.X%, EBITDA margins The basis XXXX it were demonstrated segment volumes headwinds in points. increase can produce

XXX,XXX medium business is the trends postpaid quarter and were on and up move prior year. Fourth prior from were public wireless Now of from sector, phone contributing additions our business gross slide breakdown to small on postpaid to Business our slide. let's phone up net net segment A the XX.X% this adds adds XX. which year, remained of throughout within the strong XX.X% year. primarily provided

year, postpaid points the prior basis which postpaid business continued the and Total X% were to X.X% in prior led was in Our strong rate X.X% versus over year. while year. X of in X device activations loyalty segment phone customer up quarter, the the churn quarter our X% was up upgrade points across sequentially the the basis prior retail down over

customers. move driven financial up Wireless to slide X% segment X%, revenue Wireless our performance. revenue XX was revenues Let's for quarter business business and in review product the of small declines. the offset the revenue medium business wireline over now primarily partially grew by X.X% Operating by were approximately year. prior fourth growth service to

and driven traditional double-digit partially perspective small growth X.X% by wireless growth, group revenue in prior customer voice XX% services. revenue data a business more From over by offset ongoing and increased the than Fios year, medium declines of service and

to other services pressure offset sector was declined revenues wireless products, XX.X%, shifts. declines pricing Wholesale by by driven declines. legacy which price and by growth by technology and and X.X%, declined revenues and in legacy expect decreased wireline compression revenue enterprise products wireline as Public X.X%, driven Global wireline in volume continue. we

commission such lease the business-ready launch and reductions segment standard. the year-over-year expense growth processes. reductions in as in Business deferral margins down from activations, XX.X% margin we and wireless making last transformation go-to-market from in including basis our due accounting to the of of of approximately the wireline the basis the the in year, The of the business, points was XX points are headwinds our in EBITDA are in XXX campaign marketing investments revenues quarter,

of on the move at Verizon beginning Media year. decline to the essentially discuss $X.X to make year, Group. slide the progress to the improvement Group XX good let's in Total Verizon was the Now, revenue from meaningful was Media which continued flat versus quarter. a reported billion, prior

While work we platform gain ongoing the do, search and traction, with demand-side in Native streams. legacy advertising the continued have desktop foundation the revenue we are more declines future and we results mitigating our for are to building growth. pleased to very

Let's reconciles to X.X Verizon now move results. our to slide legacy XX, Verizon results which X.X

to this XXXX, the and a X.X wireline. back consumer EBITDA reconciliation As results we close to slide we and The providing revenue time. last are wireless for and segments out business on legacy charts from our reconcile

consumer chart down arriving After wireless, the revenue billion billion, wireless The $X.X X.X% with wireline to bottom EBITDA in quarter. $XX.X removing business of quarter, shows had chart The the similar results, from the total business business revenues from adding shows $XX.X consumer margin prior of of back XX.X%. with of in a total starting revenues of $X.X top and billion wireline wireline year. and billion at reconciliation revenue we

wireline last and from most EBITDA business product pressure XX.X% were future The the drive same margins factors largely margins growth. are ongoing the those in to from as declines segment, impacting wireline the investments the legacy year. XX.X% down highlighted notably revenue

can in our supplemental included website. additional detail our on information You find

quarter. base operating $XX.X was the stabilizing a the wireless quarter on X.X% service third range, targeted below total increased from Total and the pricing fourth impact to higher quarter, revenues as fourth our that protection which plans, mobile believe we amortized result in optimization move of to now action Let's benefits and revenue. increase gross in the taken the into and primarily The in results. by revenue billion to reservice XX slide is our performance driven adds discuss wireless increased pricing new promotional a expense of X.X%

includes full EBITDA approximately revenue XX a a increase from postpaid wireless total the grew X.X%, in phone lease Total ARPU of commission by year, headwinds primarily adds. in X.X% of and the percentage of the quarter standard. driven wireless For accounting revenue was XX.X%. as and growth expense This service of margin deferral retail net points, basis the XX.X%

We this in the given are proud the of volumes driven result, particularly strong quarter.

from Continuing phone the Postpaid third for momentum to were highest in fourth six net which last marking X.X% a in were performance the were gross years. quarter ago, from year. adds quarter, phone adds up XXX,XXX, up million. quarter the Postpaid net XX% was XXX,XXX phone quarter the up from the X.X prior smartphone add XXX,XXX, our the year net additions

churn was retail Postpaid of up phone churn year-over-year. X.XX% basis of total year, last up from while X.XX% postpaid was five X.XX% points

year we postpaid postpaid in a rate a increased result from to This X.X Total accounts X.X% XX,XXX. activations retail net additions increase a up customer of For gross our device decrease by year by million, to were upgrade postpaid the offset X.X%. a was X.X% the in quarter, ago. X.X% prior from

for outlook both business with our in accelerated on our by in slide Now which volumes positions growth for focus on strong great wireless segments, let's focus consumer reflected and XXXX. exit on We us XX. the execution together year with XXXX momentum, our

momentum outlook, and expand growth segments For availability the and expect in of trends reach wireless in within expected growth to this as revenue prior percentage the we compared our business both and equipment Included year. increase to revenue an in low consumer XG we single revenue the and mid network. consolidated continued are service XXXX, in digit

incremental expect and to the For growth year, adjusted to well earnings improvement within X% growth One opportunities growth continued cost well both but investments process in expense of see such the other earnings only driven work and Fiber as create business new as revenue cost impact and as would savings, ongoing service we not includes in commission that by MEC. product and X%, XG, group areas and as deferred initiatives. business Verizon tools growth full development, of Adjusted as drive recurring consumer

benefits materialize back increase work to expect cost of end starting XXXX this see the benefits to of in revenue with begin in XXXX in and We XXXX.

revenue opportunities are our future expand about We the margins segment and excited the will in future. believe business in and

line, to year. impact last Interest we and XXXX. amortization similar due our Below depreciation be the management the to liability expense decline to debt lower is to and expect expected balances of

We guided the with from be expect XXXX Adjusted two rate and tax XXXX prior level. the in results XX% between line below expense XX% years. effective in each fourth quarter is to quarter actual the

are including markets; to in and of within densification ahead We we range, financial and although additional results capital and be growth our demand in our build fiber summary, billion XXXX. last $XX normal ongoing expect the the continuing in our positioned XG capital billion consolidated strong than spending earlier network our in our between accelerated our on year. In spending and intensity of capital higher $XX timing performance expansion year build; guidance expect to for existing the be will stay XG new to

let's Now, look a allocation. capital at take

allocation balance dividend, in sheet range. and to continuing year investing commitment the process to managing targeted capital focused. upcoming leverage the for our the our achieve and Priorities is business, Our disciplined our remain

target fourth our expectations EBITDA priority a of leverage share of growth policy. the free repurchases for to capital range the are in cash we near add end XXXX, healthy flow and With as allocation our and high pleased

the will met investment Repurchases purchases in including segment the rollout, investment highlighted spectrum earlier. potential as and have priorities XG business begin the after our been increased in

earnings Our from outlook for excludes share benefit growth repurchases. XXXX, potential any the

growth. offerings, can the we updated utilizing strength, promotional the for from unlimited increased throughout positioning effective position partnerships, volumes revenue improve of drove and up, sustainable we and grow which XXXX company a service the strategies Summing that company in demonstrated year,

continue we Our leadership. XG growth built drive right our strategy new to offers network as strengthen opportunities further to

within years. accounting making investments in in our expanding industry. adjusted impacts Importantly, drive we our we period, additional coming are for strong a legacy and competitors leading to face which the margins as to during continue industry challenges we Though entered products strategic our results achieved services, while growth

continue in addition, strategy improvements. necessary in allocation, In focus to our to have approach within our we and believe group key poised is commitment deliver to and assets to capital strengthen a we strong media drive innovation. make we further and delivering growth XXXX progress momentum the appropriate our Verizon balance we In on disciplined and our we remain to entered sheet. Execution short, with

the over With to to your that, I'll turn call Brady, so we questions. can get

Brady Connor

Matt. to Thanks, ready Brad, take now. questions

Operator

Thank you.

begin We ahead Instructions] Your session. go first [Operator question-and-answer of Feldman Goldman question Please Brett comes will now the Sachs. from sir.

Brett Feldman

Thanks the was results expectations higher ours most question. spending on the P&L. the of for I versus fourth and principal taking it's looks The people's P&L level think in it business your wireline in and variance the quarter

step-up During drive your investments segment the in about remarks you the business a future. talked to services growth in

precisely to guess billion fourth So excess rate. of spending was you clarity more in run that to annualize I I $X well if I'm what is, already the hoping mean, what assuming see that I uptick it's I incremental that that in started of quarter get are OpEx. on we've on?

and think I we spending a of where So that lot payoff to flow to through. how you're going expect there's in interest be should it

wireless must be in operating an would this annual close somewhere you you're are and And people year that of then offset better so that there just your the leverage gave guidance flip business. most to it EPS what pretty for getting the looking looks for including is, imply side us,

through And was performance wireless so you margin where you just coming into is Thank improvement I and hoping maybe you. the as the on walk look from cost can XXXX?

Hans Vestberg

had I you're mentioned start when quarter Brett and so business impacts I to group. doing group, our the fourth in in we're right. of business mean, on investment them. we the -- some comes that can it So, already the Matt

deeper, cetera, staying customers, If market CRM are behind I with and actually in small full portfolio dimension. enterprise tools a working for been all our I all we we our to this of And approaching billing now medium et And say customers, get as need those just that's the hasn't a our line the means in investments need expectation. we're system, see to go That invested mean the customer off. then year, end guide and yourself at of your impact why will that you before we the roll there. and to in we you on also invest of they're see going basically that

of these we're because -- just need market are, in investments things fix address it and course, to side couple doing go then part right in right we will on way. of the investments one-timers to order the So a the away of

Secondly, the continuing. in wireline is decline that business secular

the in But we're cost group opportunities we're a that's bit very excited see on seeing building if is more there the XXXX, business even that Network impact said that side. But little answer we'll But impact revenue So impact the all-in-all more that because your question, sustainable. then yes. the order have, doing why about Verizon in anything address why and good. the will years best this some first XXXX, way start the remarks we is Edge to that are that's also quarter and of actually reductions coming gradually traction in market in this Verizon to customers four really the some on in with our the the Intelligent in three, started Matt fourth we add? is ago XXXX is, we

Matt Ellis

question. the morning, Yes. Brett. Thanks Good for

we're announced saw business certainly parts of structure. we new about of future than so as excited the the even in that we Hans more opportunities ahead some our the about a did years, But uptick We So been when operating we today so very feel a spending focus haven't strongly the in over VBG discussed. investment there.

billion and run for of that number in mind XXXX. investment rate $X of we a the annualized mentioned have You kind certainly that's in that not

the we So XXXX. you But the earlier, the of second would expect comments impact XXXX be. will I an did see go we in that's significantly to with that saw back what XXXX margins on where to say half think we overstating line number in if in

beyond of side XXXX benefits business transformation start would back in thing to the of that see investments, here XXXX on the more side. then impacting But making I the confidence the fashion I the and year segment. we we'll business -- both think getting is a level revenue end we activities we into of the the and of significant grow cost the within the expect revenue the on these can that really around look over and underlying time margins by have

So what on. focused that's we're

about of the margin the company. asked also You total structure

offsetting suggest this earnings would things it you've additional the direction. If guide there's some other got cost, the in other

growth. When have starts and it to you other starting service both of then point for as and the with consumer would the year and our good revenue growth that. see think lines strong wireless business When I revenue. expect ongoing continue upside activities through gives earnings that with the of in mentioned earnings VBG, to we in investment cost you to even the we're some that a making with a you that I revenue combine result side on

Brett Feldman

you. Thank

Brady Connor

ready we're Brad, for question. the next

Operator

John UBS. Thank comes you. The next Hodulik of question from

sir. You may ahead, go

John Hodulik

lastly, of And of Okay. more fourth the revenue bit a it drivers expected we in little you flattish customers? in in of Can your quarter. here detail on wholesale looked revenue give wholesale year-over-year be on came rate, were a XXXX there the Thanks. growth this subs? kind also sort growth consumer would commentary of little subscribers on then given like revenues MVNO than Maybe the service of especially service any And in in for sort light quarter Thanks. bit the lighter better-than-expected Matt there in us wireless any to great? reset some sort looking sequentially. the out especially growth Was of

Matt Ellis

say as them service for reasons we wireless below whole and at was of for in guide for speak revenue all a John. both customers. Look that that to the creating as the growth the couple fourth A value quarter our that with had. you Thanks, X.X% actually of we're

initially little first a we new saw the launched by The people to that we the than moved who structure in to is actually faster optimize August pricing had we actually anticipated. the opportunity moving

more got think half see behind an so might expected but us XXXX, little it and in earlier in that's the first of of XXXX. we behind And we certainly complete of a now than us impact bit actually

line. noise is And promo costs of -- service of standpoint then and revenue handset of revenue. A from the amortized bit service the get other a in capitalized part our a accounting our number against little piece

in when line. that gross around where we promo amortization So that had we're year-over-year quarters. volumes What service you adds revenue in to and increase is in XQ we're against the the XQ up both we that XX% have an had in means increase coming see starting

of mentioned, That strong impact. trajectory headwind And reaches another the business we in But the as us. until for kind half growth be the of year, about highest year a of first in plateau as terms good of had bit certainly, of you level had, little of at of think as end the add net very will revenue that that that the feel a service of about net we've the revenue we adds six the we having service ahead a years. well number the XXXX

and continue. well performing is to we business consumer and So the in business in expect that wireless both

Hans Vestberg

So of we to unlimited, model that launch enjoy but clear type only mean, our our mix this that and Matt the the match, add developed to part since have had strategy. can I different we can of our of also a see of I packages customer constantly in sort on very is strategy. of course

roughly see can we And net the and XX-XX unlimited to metered have to our that the see made with why able go We customers payoffs up that's be and metered the August. I mean in move here today adds. You unlimited. we

seeing So you engine us the the our journey of we get good. And customer have for growth that's the putting that more the second that and the as that a can extremely or second actually coming into continuation for XXXX. seen unlimited -- in we and is packages of in see half value the quarter

really to good with that cetera So that we job but Ronan think forget Tami thinking do Dunne, this. a here don't whole of the with they customers have well. wireless team are the about side also et done as But have I more business

in So, responded with that the market. we're how we our when in offerings see and has really have what encouraged -- done well we the

So, and encouragement what XXXX. in half end for we we're happy give seen last have the year us with

John Hodulik

Thank you.

Brady Connor

next the for question? ready Brad,

Operator

Cusick ahead Please comes sir. next The Philip of question you. Thank go JPMorgan. from

Philip Cusick

guys. Hi Thanks.

shift fiber year within really we guided do? any build? You should And that put fiber about CapEx you similar the mix terms or to the starting a shifts up billion types and of to versus XXXX versus the locations $XX at you. you of of in monetize wireless XXXX talk think billion. within to Thank the big either any fiber CapEx the Can for about build in $XX terms deployments end number the when plan priorities or you to of

Hans Vestberg

Thank you. Yes.

a strong that As quarter, I'm you into it. about coming CapEx the happy ultimately, we fourth really saw had

right since a build course giving our interesting coming the and quite do Network, the that of in possibilities thing that our see we course up now. efficiency and to more. continue And CapEx Verizon what in we have that more to lot in can You launched us Edge found dramatically Intelligent pace we're investing of here is is constantly of is

build. need XXXX. department So, in our they in as the I think fiber for fortify XG to in strong that no on well continue our our to they XG to order network have This us continue continue plans is constraints do with for additions technology have what with as to what

to when it do And fiber build, already the to that. of we're comes monetization starting the

of a has fibers that small that. course our Then enterprise come because our now and seeing the Of doing it. business, it et part medium of now and a right sites was because cell of course benefits monetization are going bit already But for the to cetera. on clearly in air businesses we're later many little of

I And, with into and solid are a work. of year CapEx. course, the the it's a go if technology design we lot it's new to spend also but a change of the of back three dramatic how because that worked how have going network this XXXX, allocation and years, do team evolutions. team Matt the very on have capital technology we XXXX for reallocation improving we think inside the XXXX and we So, every we our

Matt Ellis

Thanks. Yes.

monetization fiber, few months. our you're example. of the network multiuse to the So, of give this starting have mentioned I the on see network. mentioned, it's folks an as and past think some Hans And in But impact I'll a the publicly already

were to of majority and we're last own get into You fiber back -- quarter new of the up the quarter adding a fiber. going the that of going now go majority where year -- fiber. up year fourth markets significant is on first sites you It's cell in on last our third-party our the XX-plus

our significant you'd expenses benefit forward. So, significant -- beneficial going that a on will think have

as we then monetization to next other we'll continue the course the And add go, couple opportunities over of years. of

say starting statement. our the build income So, benefits see fiber we're I'd already to in of the

Philip Cusick

Thanks Matt.

Brady Connor

question? ready for the next Brad,

Operator

you. The may Barden Thank you question from of David America. go Sir, Bank of ahead. next

David Barden

two taking I for Hey guys. I questions. Thanks guess could. the if questions

the and around to just for of think a it. launch the the themselves XG going position XG around to degree a of iPhone with back in part kind of respect go to possibility market First, the that market kind and various are network the and I how of there's of might of to the anxiety carriers as that emerge competition level year about

playing the this you the XG of give So, how half see of out cycle color little us if a you on iPhones' with year super could emerging? kind second potential kind of

be a has in about of allocations. address network questions and wanted their an limitations. we there's is of that spectrum organization that's some management second handful the Opensignal others shared kind these going strategy just that suggests that kind kind is Verizon's called you of And some that raised with of to a And stressed strategy Verizon be what would as of maybe I data guys there's then have markets sell-side of to think I into terms bump spectrum that the

could? that guys you you have to want just address if Thanks. I So,

Hans Vestberg

Okay.

already of devices that we're Ronan market in beginning question the the to going I the On in the coming some there. XX out year Dunne first year. this have said XG mean

had to we're than devices build in going coming out. more of see So, It's course, to markets going we in XG the year. XXXX more be last

this XG a course, even of more is is in. be year things that coming So, to going there

But, high out comes it on the comment of Apple, XG that good the company market, that for is a means a particular it in many cannot what look they important to will of iOS into is which phones come coming degree consumers because we do. if general, course, When that will market any change. in a to this we'll leave to that be a to think out when really from has phone

building building a XG experience we're do. In our is wave that and the millimeter with our else capability unique have to case, think I nobody

mean, best you to we going So have have think as to and latest have where that. that's come. will difference RootMetrics. the in I the network I really the We're seen Power XG already J.D. continue

network. customers. will would we difference. we to grab So we're will the that feel best network we also building -- confident the going experience to give And that be big if and how devices on with a confident if come more that why we iPhone out, the make chance for are to And have I'm these our out, all that's -- good a want coming actually including customers very

when all that mean, might When think mean, talked have thing of our and about that, are have strategy, ready. and course so all spectrum able to we first millimeter I it deploy be spectrum using XG all one sharing I of the many the customers wave is nationwide to dynamic comes of I to I when assets to comes it this our that times.

that's clear. think I So

it the of network. I is my XXX they a lot seen. Think that think It I a lot carriers is carriers I that the a in that about world is not have what that have clear with thing mean, to a another very great worked way. only thing needed have don't They spectrum great do in I use of spectrum. is right around the don't life. network.

an sustain would performing from on never we're how engineering Everything And a company, about is because the in densify of think software invest what planning actually where our more, people to thought with we unlimited. that around we're growing that we at world, and networks you many go the you think deploying us, company. capabilities And long-term or getting -- how put to software we wrong headroom do the the deal when that's data. came how I have and as to spectrum you something and that's right. companies in to I type more look more these this us I network the and how because continuing been have and

feel we again, we have. the good So position about

of Of frequency there is C-band course, the come global. will important it's doing spectrum of course know, one out all, plan I global think for an FCC's we many mean, the be reasons. might encouraged the first as the we're We that of all that. about C-band. And spectrums of

that. be for roaming very important that. on into into very get to So that's to get done important for market Verizon it's U.S. And and will it,

on think strategy I great right XG -- but network it's to our hindering not now the be capture market So a XG. and to deploy able

David Barden

much. so Thanks

Matt Ellis

to for planning. I'll our add needs meet comment They on missing yesterday in mean, engineers at David line that took said on Yeah. just a much have I and piece. that their to so report many terms years look of there's of one that our sight they come.

none. And the think, on second money week and day is our record engineering track their so I team every of would I put to

that continue very spectrum need have business. the confident we very, to the we're grow we to So

David Barden

Thanks guys. Awesome.

Brady Connor

we’re for next question. the Brad, ready

Operator

next Simon question comes The you. Morgan go may Flannery ahead. of Sir, you from Stanley. Thank

Simon Flannery

there's into your talked Obviously, about Great. XG then how CBRS. on an see maybe Thank you on that whole you. comment Good Home, you fitting it. lot morning. On a haven't do plans? you coming spectrum, up, could And auction just

your With see What second the half for of XXXX? you. what are CPE coming, should year? we is that still expectations Thank the in

Hans Vestberg

Thank you.

get a we it's long as a addition the order already to started in fine. how portfolio that to ago customer that expectations. CBRS, it the We good you On to works it trials quite and see works we for do see good think know, have time and

to but definitely is something important else, it think out. of spectrum though going using is we're CBRS So be anything it an sort comes than more it's we as share even

the XG to commercial that now least Secondly, goes come product will later probably is it quarter, The which have next-generation comes of coming takes the we Home chipset that mean, the us. CP plan in Home, you're device. in for the bit when is front At because little into I time actually means out. right the XG from what to some a chipset it third confirming out

By we have happens. to the start course so launching be will of will deployed we able millimeter more wave that markets across country, more many then when far

Home back of that scheme come the year a grand XG plans to and the half the So little bit ago. about little that's February for will But more Investor that we a more our what bit a XXth Day, when in no talk it. have that's different said about from

Simon Flannery

Okay. Thank you.

Brady Connor

the for we’re next Brad, ready question.

Operator

The question MoffettNathanson. Sir, ahead. you. go may Thank you next from comes Craig Moffett of

Craig Moffett

you any morning. not to you for to our the YouTube a story option of mix where seem it the the you video video would the to is Fios much that's and why tell? and and offer? broadband intention? share TV only choose the And business Good far your miss make to that step on days, Can connectivity say better save Is your that better offer the match early customer results? off a really it's have early Hi. very mix offer it's know seemingly lot to but focus money. with I match that Fios of video And hard

Hans Vestberg

Thank you.

if it's Home customers mix of we it's our optionality fiber or when think comes match, give broadband, to the optionality. to top give the want I them it to on XG we and broadband. want If broadband the the

see over-the-top But is packages and always match right they course, another more now use that having have fitted them. optionality to giving broadband services. one the is that a of for Of is optionality and the right course to mix

course, have clearly optimized. can a is early packages. the – choose be you can that been we using early they're of it's channels what for whatever because of see But they that channels suggest for or on indication that that to going course more what customers come they and in Still trial they has what is package month,

our the having we address actually the where for content just think it when for our market because of do to the to customer going So their it's them of good can give is think And and good for also we but it's optionality think us consumptions. about it. want them our experience can customers they all market I customers I comes and different ways

matching So I our them is we're course, more the mixing of service meaning have work – that. can that is the that as are any you a a little everyone bit optionality. content. And And want NFL of giving type but all optionality you what we this you it's content and given we as is think where this going we're and early, and our owning market I happy think over-the-top thought with not the and great very in in here content market said, opportunity customers more coming strategy see need

Craig Moffett

you. Thank

Brady Connor

ready Brad, we are the question for next

Operator

comes question of Rollins ahead, sir. next Michael Thank Please you. go from Citi. The

Michael Rollins

Hi, couple follow good of up A morning. questions. Thanks.

to First with as low range the relative revenue Can to of the end points lower the for the guidance to drive range? end XXXX. mid-single-digits of revenue you what range frame the would flex the growth to higher of

fiber activity means can current the And just frame after then for us you're to amount put deployment company's second over the year Thanks. the us help just what total five three longer-term expansion, to fiber you with respect a for of trying into context goals. also go period to to the

Matthew Ellis

Thanks, Mike.

a So and let guide me little bit you. start that with unpack the revenue for

service year, digits year individual revenue think you I trajectory continuation get that they're the as you revenue this the line to from so obviously consumer. of It's to next far would you've pieces as about a how well. through X.X% within seen if mid-single other low go So

very those down continuation see slowing those revenue business, strong. of then again We don't And trends. service within They're soon. very, anytime

So better. nothing but within of little significant. wireline the side will bit be A business on that improvement

about within a so XXXX. quarter, even the from revenue getting then And headwind than XXXX XXXX in down you full of about that basis of in on in flat X% a back media but year to fourth media, think being less

within knowing year, the the be that was overall the revenue that total X.X%. in number what Within number, But don't negative exactly it is equipment half to last wireless the as you X.X% XXXX. iconic second guide into We season obviously expect the like. in the the launches primarily biggest and holiday wildcard see, and about negative get of think in of terms the we we year as

we've But consumer about growth the as past really over that the forward result. about building and of business across feel revenue years the and guide we momentum here the optimistic built a feel course pretty good going that both of couple on

Hans Vestberg

were I during month that mean, On think mean, couple – right I a of XXXX. from planning sort We're It get much first of We years per the now the is the it fiber took than all it. right and we way get now. good some to doing of quarter can The get that in it said I times two team side, we level of activity starting we're on scalability out pace. around really beginning. to to more us at it the

our of way owning Remember us of or of disciplined also, cases for looking and that with In we as always deployment. an the prudent leasing at we really financially many is network. it multiuse do someone because advantage between or trade-off and very a owning see has it the our sharing

our business doing the time. side. for We're we're sites going all revenue create to Now

as the is a in we're that critical most to Network couple think But to of in actually have. delivering So want build today of in experience and pace we probably one doing We start we the Verizon the fiber that. and about right network we you today's the – left I on need Edge this there. XG this years the of multiuse world, Intelligent have assets good fiber a expecting. I general And especially now we be have feel

the we where basically with that's So are fiber.

Michael Rollins

you. Thank

Brady Connor

we Brad, are Mike. question for next Thanks, ready the

Operator

ahead. Tim next Sir, The comes you. Oppenheimer. Horan question please of from Thank go

Tim Horan

the other just what also maybe going that's XG lastly that how dynamic than for customers coverage to the talking you seeing enterprise you or timing? XG And just how ahead thinking, use further about density? I either and much then further important on Thanks. customers going selection think With both for I to any and Thanks. you're on are kind be is XG, your and very using of for coverage that. you're peers? just you're consumer spectrum color think Can cases maybe And some talk

Hans Vestberg

Yeah.

the spectrum seen done. On some you PR, as have the DSS, we're dynamic sharing

is We gotten our this ready DSS. view. point of to baseband of from And taking have work for software already the majority the

actually that XG. I'm we're and you market We be what going don't to to about is it, have it's we because why we least I'm we're that, said, we ready on customers. to want than at millimeter extremely an our have to coverage. the network feel date, to want have more a still XX exact network. see and best And speed XG doing We best the that's times give And wave give performance and that we think when there our we the to have the we So need network superior talked XG to what going tell to remember important, but we XX again, ready because throughput we the customers not want have you, to deploy called performance-wise. going is

a course, also little about ambitions even And have more that's that we But – sector. talk during meet goes a three of a get all network. had of course, mobility think them XG Day, we're what the on also When the that. year mobile that. not going I of are bit last we are case that So edge about facility, very where home to think XG come data do comes in-depth Investor – factories. in that's the strong the for we network. it's more all order and them. networks multipurpose we it technology higher private has for for deployment you XG it our mobile talk XXXX, in on. more we back the come keep assessed. it directions will And the up use see campus case, in using bit We'll to we see case little and I the that edge little a that compute But case, multipurpose some to coming we in early cases, to We already in can a in about XXXX. compute, forgetting and the When whatever I and saw bit a use we in a our around at three when but and see because security of private It's comes if optimization of throughput the lot the

blocker up of on lot stadium, millimeter event sort and see can you're big coming here It's Sunday. experience Football, American in can wave how What called a the of guess, I with the on limited With to broadcasting side, for use the when the a today innovation which XG both basically a cameras stadium. consumer we the we is consumer, with our there's on content. going uplink it distribution stadiums, in a of On but we do new Football XG to spectrum for the comes lot positioning, quite also big are there.

you as continue weeks it, more quite will cases, York the on to of here. to see couple meet as or to in and we lot going give we insights when next, New say, you're well four a think five days consumer I'd next I So

Tim Horan

Thank you.

Brady Connor

Yeah. for time more question. Thanks, got one Tim. Brad, we

Operator

question from Colby Thank you. and last Synesael Cowen Company. of The comes

line is Your open.

Colby Synesael

to I color the about wanted was for Great. you talk Thank on I timing. actually talk any providing buyback. you. could if the more about wondering, potential

you it you take end have a of before? have have You spent actually we it's then and buyback? to could place was before could start actually later have doing ultimately of you up I think year. the the or had those June sensitivities whether Or understanding of C-band early mentioned a better maybe year Do purchases auction, next to first to in one do CBRS potential this and you spectrum. Obviously, what

various the when to a XXXX it that? and wanting if of will that some about companies they're with specific you. anything your important to to of debate how catalyst, going you we Is specific contract there's And Thank relationship that expires there should that be leave? lot about competitors a that. around for making comments And current a be go is maintain your to date then secondly, or some been you cable thinking MVNO could to that after try

Matt Ellis

thanks the Colby, for Hi, question.

So with the quite buyback a We're conversation. our great board on had approaching be conversations leverage to the it's for look good having target this while now.

what largest As And the change allocation capital so you that announce we this in model the here. to is couple a about comes morning. variables of get as closer range one allocation to And forward next? the target going capital as spectrum But we glad think there's mentioned, of key those.

exactly don't be I of get when to know, the through key line is So we of but a auctions, if variable. having kind actually the sight auctions need will to

our actions of also we taking FCC And timing a will to the any supportive as on to make the very as hopefully the buybacks. spectrum So clarity is near-term we're of in that more available. little impact get try decision future, much

number dividend little growth, this expectation But as a with card, think and billion the CapEx to expect capital after and billion left be after out back EPS see strong CFFO. we the at year. bit basis. conversation year the might that but that about an you of to And year, Last having $XX.X wild reason year-over-year I you dividend we're cash $X.X strong of even is be cash it expect on of flow again buybacks, free higher And last over. that a were why a be flow we would saw working

here. good great forward So, some make can position, a we it puts decisions us where in going

Hans Vestberg

the I to better investments -- on as why else can us. want we're network. as and MNO, having anybody That's our a we so than Service it monetization On that's as get is a for we're this capital important relationships building Strategy, how

really us are think so of a It's important of the And MNOs relationships, We ongoing managing are large its relationship. sort any and that's multitude an enterprises. important. we stakeholders

another We them, would good agile the you having need technology from on to enterprise different and see both that we have but side conversations no it's with have.

see top win-win of for equally same well. hopefully value think they So -- as time good a a in having see it's over At I us. the And best we the MNO both on value there as network of and country. the

my there. we we sure it any they to and saying And continue are relationship comment, what will to as will that our competitors hard we about not be are continue very me it. again, important insights customer. have. good it's for about So, we I'm But what to managing see feel

Colby Synesael

very you, much. Thank

Brady Connor

the time have all today. we That's

a to real the Before I for call, comments of closing end to back Hans quick. couple turn I'd like it

Hans Vestberg

Okay. this brief I will one. be on

Day have all QX, we I Investor said, the and things XXXX February. have here about we and for coming relevant in think, as I our talked XXXX up

our lot branding set well all role. result. to has I did have we That The organization in So of team to from went good -- goes network but way really program all of the a at change, transformation change, us and a for that it. continued to same I XXXX. responded in the a ourselves think the all, down organization and time, our actually And up all that we we've delivered voluntary and strong reinforce

like we to We GDP -- growth have of said have would term have long that plus.

that is more the can is with year up, will come XG I is the And of core confidence this level an acceleration guide what we told in, which of we where you do the still think which means 'XX, compared have to we sort XXXX. going have. assets

but XG for great the assets build years on So, we we a now, right work forward also have after. with going foundation we

feel executive much So, the and very team, how all-in-all, I on into the you, the think whole excited I up. that's and Thank sum team coming XXXX being this company it for call.

Operator

this Ladies Conference and for Verizon you Thank conference does today. gentlemen, Services. and call using conclude your participation the for for

may disconnect. You now

Verizon Communications (VZ) 30 Jan 202019 Q4 Earnings call transcript