VZ - Earnings call transcript Q4 2020 | Verizon Communications Inc.

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Operator

Good morning, and welcome to the Verizon Fourth Quarter 2020 Earnings Conference Call. At this time, all participants have been placed 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

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

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

get certain the on website. in we these expected included Harbor comparable the contained is and our in presentation presentation non-GAAP contains may your This growth risks results like sequential. attention to year-over-year draw filings uncertainties. The slides posted remarks SEC, on Verizon's to Before which in basis, as rates are subject disclosed to financial about and started, that to affect during quarterly Slide a on GAAP that Discussion the I'd future measures our otherwise statements and of in unless factors are with available financial are directly future and results Safe this statement events Information forward-looking X. presentation of our financial our on most noted contains formal measures. website. our Reconciliations are materials measures non-GAAP

spectrum XXX. auction reminder a for the were we period As quite in

or strategy time. not able our this be spectrum to at will we holdings on So comment midband

pension GAAP fourth per year Now earnings pre-tax earnings $X.XX special include quarter, we includes related million per voluntary under our reported disposition $XXX a to loss in share, related earnings of annual share $X.XX and OPEB of severance, the as a on of Reported of let’s $XXX the existing fourth to charge earnings take $XXX liabilities the primarily HuffPost look quarter In full including loss a at primarily net consolidated items a full year. quarter for mark-to-market from well our basis. plans separations of for the and business. as net million. a fourth resulting of and million This approximately the

of full earnings per the the items, effect share year. for fourth the was in and quarter these $X.XX Excluding $X.XX adjusted special

to year. earnings Slide our realized recognition comparability is The earnings closer from impact Let’s a revenue adoption for the look a deferral Standards prior for the the now of at and benefit and fourth X ASC commission take purposes to reduction in expense profile. move the reflects of Accounting quarter XXX illustrated due to versus

impacts now The COVID you turn and business. impacts adoption X.X% the adjusted comparability performance on not waterfall With year and continue monitor the that, the to impact over the year XXXX. the strong significant of of underlying not share of of on adjusted ongoing were our $X.XX recap through reflects do a in reported the I’ll fourth We illustrate slide growth on expect and and of the Full earnings ASC to of $X.XX impacts both COVID full The XXX a also respectively on the per ASC basis. from XXXX were to year-over-year ASC We quarter. earnings both significant results COVID of EPS a have Hans XXXX. XXX business. to take to call XXXX XXX

Hans Vestberg

Year Thank you, all you. New Brady, and Happy of to

that never that our before. say in changing supported we I’ve challenging during XXXX. to Verizon was a XXXX a environment all, year our I employees responded I’m how super of the seen proud way and and First can only customers, society And

as of that all, well. good priorities, XXXX So, strategy to great execution strategic through let At financial same comes our the year. well it so walk really me we performance the all time, When in our a executed on we had them. and

really in it richer best to lead working that us have I'm Disney+, just we I’m with we won to First the offering, us building of to have how year and to nation. on to overall innovation, important in give they Power’s of also X our we the better of a time for Apple And network network our to that have continue announce doing even includes the team, XXth different got migration Group. also the that of technology all, customers innovation that been award. Discovery+, our lead. the When have them and Consumer unlimited. This continue We tells and That Verizon XXth that supported iPhone to comes announce XG, the customer lot proud we're unlimited a to strengthening see from to network network. which best happy performance for course, the this the time has, and adding a continue seen the so with the the we consecutive on It network lot market. is business, about RootMetrics you to J.D. and we customers with the core in also categories. a seven how premium grow all great

much now local public drive it to it can that. Verizon XG Business in when had adding I'm XX good the Group commitments cities. the performance customers new we did stronger XXXX in all Ultra leveraging the comes for enterprise were we to wireless, happy good in new the exceeded. some also met growth, very that has comes with that sector, and February to on We assets see Wideband have When see or also us extremely a side. putting the foundation are like investments a to you growth also the areas to year Finally, on and be future

million our XXX home POPs covering sites the Ultra We Xx And Compute Amazon. more deployed XG Ultra Edge we than more have we public cities XXXX. in nationwide all, Wideband now on more Mobile in XX All are XX we Wideband, that during with cities. X,XXX centers than XG is launched

than a service wireless in the had financial revenue. where strong growth X% the side, On year more we ended

growth the carbon of is which We launched is our the half work year in And great in very bond into really also a an flow put XX%. focus over the at we of XXXX. include we see all on really year, aspect while a proud growth that which us quarter, to finally, we’ve how I’m good EPS important; of X%. during to strong And billion, the way had fourth being four We going $XX.X focus where, second part and the is of in that on full the course, A XXXX. are large us doing. a very operational of cash last have neutral Citizen position Verizon year stakeholders our that of was strategy, is on a green launched society for second our our

the vectors us growth. same in strategic is also to hit plus. At are sell-side of I’ve the that milestones we our all at GDP strategy on get the pivot enablers where all all five was the as So, vectors and it of a event, the for based November say, to presented very Network-as-a-Service. all, to execution Those I supported our our great Those we are year, different a time but stakeholders.

go are which are other lot we we all and Verizon way is next-generation Network that MVNO many now ago other that pending X the are addressing, unique that as in well Matt partners. great we and have the network in business-to-business the acquisition on like network With finally, And but a still Compute over little of partners, our we Mobile application addressing have bit enjoying segments are with Microsoft as years some Edge have we to with also All that TracFone, them, have XXXX, to differentiation all, more with we the this and hand We based traction Intelligent that, customer execution opportunity we monetization I the XG offering adoption best us in outlined the the building. great talked on the through the about, from a on to giving Edge our also new that in the the built and done detail. the financials markets have a future. would lot quite have I Amazon, to we to

Matthew Ellis

billion was to I’m and results XXXX. proud the good you, would quarter, revenue were the Group $XX.X was Hans, revenue as down fourth Media last like saying EBITDA basis billion, deferral X.X%. by the year, billion billion Thank $XX.X adjusted wireless Verizon driven offset adjusted by and to and in increase year, consolidated In XX.X%, service higher in basis points disciplined results operating compared and Adjusted morning, other commission strong XX by the team totaled from Total revenue of EBITDA $XX.X points how for expense. a $XX.X consolidated Verizon headwinds and year approximately last including and spending. wireless equipment revenue Full in start lower legacy service than growth delivered declines we with growth XX I margin X.X% of the everyone. and products. EBITDA was wireline ongoing quarter

we additional savings be COVID of Our ahead to of continued of our will savings working, $X.X well billion, these long-term brought believe create year-end resulted realized are XXXX cash current ways focus Business some achieve and opportunities the our goal has program nature. on cumulative billion has about in will Excellence and new positioned in target. we of $XX This program. our beyond

up fourth mentioned, Brady $X.XX the quarter As $X.XX, X.X% adjusted EPS from ago. was year a for

year full revised at of of adjusted business. growth our X.X% of demonstrating report to the our EPS strength guidance, pleased are end the and resilience We high

now on results to cash flow Let’s turn X. Slide

year enabled continue was primarily received our business, for from payments balance a lower one-time performance reductions to tax quality XXXX for $X to model volumes. lower wireless model, generation due and benefit driven Capital in investing to spending tax operating in earlier capital continued cash exceptionally in flow strength billion our the our dividend the prior the in as totaled working year, allocation year straight This subscription-based and our XXXX, activities our Cash network execute $XX.X due traffic nationwide network. XG an year, from Ultra base. while the and capacity XG business, Wideband totaled $XX.X and to our of increasing the growth billion, and launching expanding we to our support on Network LTE reflecting continued our billion reach and XG in strong in sheet. strengthening us by on of XXth business the increase of the customer capital our Our cash

year level Throughout cost portfolio, As the our as a a a flow higher year-over-year. of for our diversified result, the cash was of up retained borrowing opportunistically the $XX.X cash net and year, our to committed and $XX.X of billion, we of free capital optimized exited debt XX.X% our EBITDA was the net billion, X.XXx targeted pandemic. approximately We model. our unsecured allocation X.Xx of unsecured remain ratio debt range versus debt-to-adjusted quarter X.Xx. We with result to

on Consumer X. with let’s starting Slide Now operating our review segment results,

competitive is attractive with Our consumers, unlimited choice paired that the on to best on the compelling position provide built devices based best plans network. country’s all and promotions,

our nationwide quarter, Verizon the up, This supports Wideband connectivity added and line to provided this the Apple critical Disney. launched existing iconic offering, component of utilize to our with by a to which of XX coincide partnerships, remain a release iPhone our our Partnerships full XG we device. enabling Ultra which service list range fully includes We Discovery proposition. of recently of successful customers value

subscription, early customers given was the newest store XX-month cohort in that off our foot the with maintained relationship than behavior, billing and the plans free in Disney tempered their traffic activity Match the Mix quarter period, of addition included. by through the COVID of of elevated by Direct their either consumer opting one into offers retention the closures & Volume in limited to Verizon rising or bundle market. two-thirds As initial come have Disney+ have more cases

of quarter. switching declines year a As XX% the pool carriers gross third down in adds a quarter Fourth relatively consumers year-over-year, experienced lower consistent the ago. were result, than phone approximately was with

more the We service. our plan. XX% as additions over we premium for than of of At was in our an attracting, plan are base and unlimited of pleased of end, of premium these over over XX% a XX% came XX% with new are quarter unlimited the unlimited taking with accounts plan, base on an on quality opted accounts

net high program more remains X.XX% XXX,XXX. of phone retention XXX,XXX our phones customers postpaid phone with quarter. of Stay customer in year to X adds contributing basis points in Our Connected from related the for than the quarter, churn totaled Disconnects a down ago, to

and our to see with since Connected of in approximately with the making expectations. will and customers than continued all service program, are the a program, payment continue activity Stay program payment final though rates to program XX% trends More the great payments. in current are payment customers XXXX. remained was stable, their Our cure on results XX% closely entering December collection of in we month the billings for of monitor line

to Turning Fios.

quarter consumers with Internet our Total net third XX,XXX XXXX. more the had to the home. was since double offering reflected for quarter build demand XX,XXX, as Fios and in work continued, than Cord-cutting [ph] net Video quarter net continue additions we consumer XXXX trends quarter from have XX,XXX. Fios fourth on to our gigabit and of of We strong learn additions best of strong continue of losses resulting fourth for the Fios Internet consumer

volumes let’s operating quarter down quarter. a primarily were the to equipment softer revenues wireless financial in XX This X.X% Slide $XX.X Consumer decline Now move X.X%. in discuss Consumer the billion, for revenue fourth to driven the to was performance. due by

second $XX.X by driven service the resilience The In was subdued the the unlimited revenue of provides in year, X.X% year-over-year a a as X.X% ARPA the Consumer demonstrating X.X% revenue even approach strong that reflect remain fourth X.X% delivering tiered equipment we decreased decline wireless for levels, we of business fees decrease for our a Consumer wireless in other from billion the quarter. $XX.X usage at recovered growth. total delivered quarter foundation For TravelPass full quarter, billion, our increase. to the results revenue. revenue to and growth as

flat Consumer and X.X% revenue year, billion, decline from the our to Fios revenue quarter X.X% impacted Customer $XX.X also relatively in regional billion, full credits ago. reduced negatively a levels. revenue related year content the Fios wireless Consumer For networks totaled by from expense. was sports service $X.X a XXXX

of approximately revenue from $X.X from were including points triple-play XX.X% expect growth to from up points the base impact the as basis year, the of benefit service. broadband XXX the billion. last stand-alone offsets in We of Fios the expense. Consumer segment the to commission to shift basis grew in headwinds quarter, deferral bundle Margins X.X% XX EBITDA

an EBITDA XX the the expense. from approximately prior the margins year, commission For increase impact of an full XX.X%, from basis points year, of including were points basis XXX of deferral

XX. continued over for remained sector fund to move quarter Small and strong experienced in year success on Slide let’s on resilient needs we modest Business down quarter Now, enterprise. XX% wireless and improved store local no pressures distance basis segment different. from state and phone of the down our churn X.XX% fourth learning prior adds was which the Public year demand economic and to year. trends our the for segment program postpaid in sequentially, government support Business prior agencies. while business due weakness. increased Business throughout remained gross the points were was was the trends of Segment and the closures the quarter, X medium

postpaid XXX,XXX. result, a adds As were phone net

of to slightly for in Slide XX, segment and in revenues the year-over-year to the financial quarter, more move now was operating the represented $X.X $XX the billion equipment year. on reductions billion, Business secular were products. than X.X% Operating to of the which wireline X.X% offset revenues revenue quarter, review legacy in fourth down wireless Let’s from Business decline Full performance. Wireless prior a year third accelerated quarter volumes by in from the pressure service X.X% year-over-year.

the appear service rates. at particularly product to communication trends second sector strong to growth advanced although and work-from-home growth small continues drive the after revenue, Legacy the Looking The from below segment. for public opportunities normalizing still a wireless transition was and improved a growth benefiting quarter pre-pandemic it services for wireline economy. medium initially straight had quarter, business in be to

XXXX Business segment, slightly within are we macro wireless last the how the segment given digitalization to transformation of sector could the are year. the period, uncertainties demand XXXX. environment. and basis strength Business elevated of with XX.X% particularly growth in in headwinds were points margin in parts back public pleased in and throughout there reflecting XX.X% the will experienced in benefits year challenges our Full versus around up XXXX with the performance enterprise exit margins momentum, the segment initiatives, back optimization. create was year-ago perform up The revenue of the Business and half of revenue businesses While including quarter, the potentially and of EBITDA XXXX the from office service XXX in

Now Group. Verizon to discuss on let’s XX, Media move Slide to

consumer was Group advertising Total came pleased We consumer technology fourth XX% operated commerce in approximately and and with year, was for to revenue strength was XX%, from demand-side Advertising respectively. prior e-commerce and The of also trends products, news platform up online year. year-over-year we a shopping are the holiday among quarter the through strength the XX% quarter billion, particular, very verticals. that finance to grew active ago, Xx other In as owned with acquisition. fueled retail, strong growth $X.X the Verizon high daily our year performance. offline quarter behaviors revenue mail the in saw political, in as revenue on continued Media users the prior growing since growth from XX% continued compared of saw quarter the engagement properties. and Growth Yahoo! by first season and continued

up Let’s of for wireless up year. the products now Key and to slide. wireless are Business move services combined the segments performance. on Slide X.X% fourth Total and look quick and from overall illustrated full this metrics on X.X% financial wireless at and Consumer year-over-year service the for data the revenue a in was XX quarter

and are supplemental website. the financial release provided details information our in on the Additional earnings operating schedules and

XXXX focus on Now Slide outlook for on let’s our XX.

year, This given we an XXXX its We from earnings all wireless driven but include excludes other to service revenue XG strengthens are vectors for as to environment. in growth includes businesses, equipment revenue by our revenues variability, current and wireless are revenue, accelerating growth five across service of which our scale. outlook and that deliver excited the continues expectations especially and providing

by service and driven For and by our as ongoing declines. of total revenue revenue is Media, legacy least as tiered XXXX, service plans, of growth X% outlook wireless strength this revenue reflecting service partially of in business. expect new we wireline Fios growth in growth X%, well total at momentum acceleration and least at in Verizon other ongoing Included contributions wireless offset an unlimited product continued customer

well see $X.XX XXXX as adjusted expected other the year-over-year full the based on We to tax sheet. initiatives. $X of earnings XX% expect and cost from we as revenue range year, of impact opening to per the recurring is in balance ongoing share items growth below-the-line For no assume driven by significant rate XX%. effective adjusted service to to be The

consolidated year XXXX normal and billion Our our $XX.X range. between full capital be the $XX.X capital for with year expected billion, consistent intensity prior is within spend to and

deployment Our focus further Wideband network of our traffic for Ultra future our fiber XG in and Network manage existing the expansion and of of continued markets, year demands densification new includes to our infrastructure.

in received taxes With year XXXX higher tax second priorities. Hans repeat pre-tax I flows expect to capital Working XXXX. XXXX to do capital. driven by to be benefit was turn that, in XXXX. XXXX a over cash higher the XXXX and discuss in in our given We by offset a equipment volumes, cash which operating due taxes of be lower Our for $X.X back in we to in call will quarter will the the tailwind not expected income cash income, expectations that working this anticipate higher our billion are XXXX, to than and one-time

Hans Vestberg

Thank you, Matt.

on differentiate based growth And plus talking guiding pleased that accelerating priorities four customers. wireless a our XXXX XXXX. pillars service of priorities, proposition are Matt we continue for about we revenue, business. strategic revenue That’s I’m the in will to the for core the that service you with value the heard X% review on starting as me based Let

in we Verizon and almost double segment sites. We in Business us Business that front have a to of comes XG year with also big to are new that in potential going to of with to Ultra invest our the together our will a When customers. in see capture platform are business, XXXX. XG we Again, amount investing continue Wideband our it developing we Group our the in we

the has all Home are side, Mobile already, then in side. to plus And also Compute some XX to during XX that Wideband. we to to we as with time, fiber private XG to to that comes coming together XG plus have add XXXX. Edge We Ultra XX,XXX us know come new with Verizon And sites XX it will Network going same comes sites and enable the the we on are on cities, And at customer-centricity to as Edge much it focusing overall finally, continue, increase included with it the built XG more Intelligent when That when market. on the will with continue also the strategy. now in the cities That public the our sheet, accelerating the cash we very when are continue underpinned going our network will per that the scale to demand continued The Verizon When Citizen the focused comes comes generation. as $X.XX totally the it to to our earnings on that XXXX of the talked brand deploying. have we per strength balance that in financial, with have earnings about to the well share guidance share. and Matt flow have purpose, be on the we solidified year focus we we $X focused and and will culture will growth, we very much

see we making stakeholders You four is managing the in are for that future. that all the the Verizon success

execution. of So year very clear, a

year progressed Verizon more have one We the X.X. on

in We announce into position. Investor excited Day early XXXX. will that to of XXXX. I’m are part I’m to we our great the have in a really go pleased normal

hand to We Q&A. will to due come with exact I by in would back that, the for over Brady And time. like date

Brady Connor

Hans. Thanks,

ready We questions. take now the are we Brad, are to --

Operator

JPMorgan. from of Your question comes Instructions] [Operator first Phil Cusick

is Your line open.

Phil Cusick

can. Two, thanks. I if Hey, guys,

that And builds second, clearly, unlimited. or environment? then to from year? the the First, the fiber on higher for growth the strategy now? looking the you're can And customers you. you Hans, growth start existing in it that important is about management on to grow premium talk given accounts promotional of where and revenue expense base? Thank we you up revenue can and you here Is that should are revenue through Where come move next how this to make

Hans Vestberg

Phil. you, Thank

all, have with start the I good and we migration momentum mean, first Let customers, base quarter. model then. better third them managing we a we I our really into a subscribers we mean, experience, better and came how the by with the a came already, of that me quarter giving and is our are of network in the third

so years. model at how more so part And for comes strong the premium. has X%. remember our I if on had we new the service talked Matt over you our side Discovery+, believe more than side. the look about, fourth enterprises have that also we when course Matt the XX% with XX the said continue we XX% let's -- performed proven out of we now premium addition you on work up. as where mean, that now account. wireless strategy, organic unlimited, And wireless in end the guidance. is worked and net said, in and quarter, where XG the we that business his than is we and in the have, but migration of with can revenue the net wider revenue That us the have I fourth also them service mean, Ronan a are to And and public our we it in of way growing our quarter, customers has a in we unlimited, path we sector more the we in And model those of took service -- the we important, very growth large important adds believe with Disney+ the the That's with to that are that guidance these adding and so we're move because we of model have team as heard with well of the

And fiber feel us lot into continued giving the So actions year the right to that I it fiber. the probably all is the it. question, of vast own four fiber. but about now. guidance say, wireless measure positives or the We with out When growth they majority our to we constantly we have majority -- we’ve three or going the a we comes service yes, in XXXX, would taking, what will side. we XG on we're roll revenue We're of sites continue good of --

We are good sites and on up investment migrating to -- for own where will XG opportunities we a resell our return t And time, enterprise our wholesale. open our to over customers also fiber. it's

couple So I think using it makes from that a that on and continue to full do order to we fiber. we where are we coming the sense have it of years in build fiber own To return a all on are the areas. build, also seeing because our left But have in we it investment. we are benefit far already a the impact, away on will XG get

So Verizon Edge we and Intelligent our part that’s of feel good really about that Network.

Brady Connor

Thanks, Phil.

Phil Cusick

Thanks.

Brady Connor

the to next Brad, we will move question.

Operator

Thank comes Feldman from Brett Sachs. you. Goldman of The question next

Your line open. is

Brett Feldman

the taking for question. Thanks

the in I called bad. that being up of things COVID I $X.XX benefit in that a imagine probably release you were the that quarter. mix a ended out think good and was

are Thanks. that you can in any have one could question course spectrum on If just give any year, then breaks So future assuming of could spectrum is you this EPS maybe give Does also the gave COVID today? factor that last that. potential guidance. Or how And purchases? insight the you then little of us reflect And out? it you the a you about bit over the portfolio guidance year? impacts what that insight this into us for of

Hans Vestberg

question, I the Matt first. can to and back start with can the last come

roaming some know, headwind. So it EPS of continue in we the things our guidance a are I pandemic charges so uncertainties and will the on. be course, there to But mean when of for to XXXX, comes

We also an think part have they equally will economic recoveries year latter in the that back, strong as probably 'XX, as sector of the had public pandemic not and is coming XXXX.

to pool been continue et the will challenge we due in switch to be year, in believe the and the subdued also And saw, cetera. full 'XX. the lower during SMB the stores has as have a We traffic

doing up Business growth that we are for and can that But the some have guidance. hand, some of first we because is from this on to do So it with this. a and What on as line think do we're migration with EPS we're how XX%. have a to assumptions we've us those we doing right work comes have years And executing. show continue other there and Matt now. the in this confidence acceleration are the when they actually there customers. have can of about Verizon now factored Media in that also said, are live that But but executing so that's and that COVID, year-on-year we Verizon many All we we our to ever sight giving strategy we Group, to we're Matt? And with headwinds assets that uncertainties can talked continued for a growth the in. we we were all, is what time of Group the we're

Matthew Ellis

Hans. Yes. Thanks,

the still I saw some and -- ability environment. of pressures not we're continue not our year. the just some within guidance, assumed of will on but we're pessimistic, certainly COVID second level execute the of I it's pressures optimistic say throughout half from We to was that EPS year, I'd either. exist the in assumption that the say level type overly you overly business on Brett, think So to summary of would the

benefit. couple what XQ. saw the it a in of there declining terms we of XQ quarter, was impact the primarily timers, one you but the a COVID was fourth In versus $X.XX there pressures we'd you And case actually a seen revenue actually was as what of was saw say, and

You think been which we impact media there. you significantly in an as the revenue certainly but that COVID -- no in example, pandemic, earlier had growth XQ as hit impacts XX% by recorded

offsets the those quarter, the $X.XX That's some -- $X.XX So benefit, moderated actually fourth continued. XXX. why you completely revenue net revenue headwinds the of benefits in which the headwind from the saw expense

no year-over-year X% a the the own impact and net and increase a in that So, XXX the stands its if have on fourth kind basis. quarter, on on of you think about results, COVID $X.XX

Brett Feldman

Thank you.

Brady Connor

we Thanks, right. are question. All ready the for next Brad, Brett.

Operator

you. Thank

question Morgan your Stanley. of Flannery line comes next is open. Your Sir, from Simon

Simon Flannery

Hans, XXXX. morning. you wonder XG in if talk Good you. could Thank I monetization about

the Ultra XG expansion Edge locations, Wideband Compute. of network, more You Mobile the mentioned Network, more the home

the including just can So looking both on should 'XX? be take forecast side, kind us of we the on through for Home in what you're your XG you for BXB particularly Consumer and what side, and

Hans Vestberg

absolutely. Yes,

in we And, now going XG about excited quarter, now XG. spot on with XX added already in kicked I off in is that with that, the comes this with new We XXXX. to right so now it taking in with Home Home, I have the course, of that for you monetization mobility has with our When we CP, XX fourth And seeing side, sort NR many unlimited, our we’ve happening. the solid with iPhone plus comes premium XXXX, are the the XG mean a will year XXXX. doing markets case. XG it so the mean, in of the technology. XG some sweet and out customers see the Apple our we're when more progress plan came that's very cities, where through mobility to

Home. in doubling of to my the we're the solid as in starting I mean, get sites amount we're remarks, now foundation XXXX. a almost you So for XG And heard

in said So, we're urban beginning. areas mainly solid dense very stadiums, deal, we're before the a in it and cetera But the now getting et in Ultra to then positioning Wideband the on very, there. very I building

covered beginning. as But we less in more the capturing continue right of and now, or So these we're more. residential houses

really I'm excited. So

self-install CPE the that working well. and good really know also is so the is We

and to So over that happening more. year we're the more forward seeing looking

'XX On 'XX, Mobile -- are but not the customers to the XG very in in see the us going great have a for you're in in order revenues significant customers Edge private signing 'XX. expecting base for on Compute, will of lot of that a we into be Compute solid and And public we going up Business side. in a both Mobile to 'XX, the have to XG the Edge funnel

lot a around of excitement XG. So,

have we built it think I right. absolutely

for opportunity now. that have of been of right an on a years working front we in couple have us We

team, we So, I'm my big happy happy sales in and have technology of I'm the us. with year with team. a front

Simon Flannery

Great, thank you.

Brady Connor

next are question. we for Brad, the ready Simon. thanks, Yes,

Operator

question is The your next of you. Hodulik line open. John from Sir, UBS. Thank is

John Hodulik

three guys. Thanks, quick got I Great. ones.

considering the you plus the maintain guys some think or That's Thanks. circumstances First, savings. the to growth, just you that sub Number about one. as two, be you lastly, in Obviously, number follow-up thoughts talked ARPA $XX subs growth to can improvement to heard, through that the the And during the that of in billion the on that terms sub of any change? something ability revenue is in you whether wondering headwinds service sort X% the year of we've Brett's sense to in business, I’m terms year? give CapEx growth. look given drive achieving then commentary you guys a if could is us a in improvement? to of towards weighted that's revised close your you're margin just the question, guide if the can more continue

Hans Vestberg

that. unlimited, now me on for shareholders financially. about to but the And our we and seen And us positive mean, make since things positively you order comes to we customers impacts we how the if and doing all I to impact how we right for have be not, the customers. for of offerings, growth, always aggressive working validating start, think in the have do are shareholders more make last think to a for launched X% migration long-term when strategy years team our as X.X the long-term our of with I it should Let always, is grow we or

team, that well. Apple services, up a And portfolio, more it this the Music they’ve in adding so from we coming with might be and and especially Discovery+, network but in to everything have Ronan proven also unlimited comes the best new working the in now lot the and of value-added migration Disney+, it when quite is as model the year

to to heard -- direct confident or I'm standing signing the can service think I are as thirds unheard that it's the I after in up than -- you out. So, up Disney+, that continue something signing how don't to consumers. guys more of X And about I that the year. are portfolio. just help mean, we it's thirds two is have I two think

On basically the And or EBITDA, of and efficiency. will Matt Matt as with the will it all grow come back reason the later a that we the on, that majority why again, continued the it's line, giving but are above said. I is can we EPS guidance say we

-- we're middle So are this proven Again, can the has date. now. on line. to growth is need This now And I to all operational assets executing. our on CapEx. right we how five means of do improvements, have and to have not we'll top improvements to we have the the team is I'm only of said, as finally, and the in the The growing model, We we what before. I with as execute a times technology sure say, thing many strategy vectors

need come we return in has CapEx we if we plans something on good execute then the talk Right that to investment. increase it. now, only find that back a we of really that front everything And have have us. will we'll We about and

Matthew Ellis

the to around back of so couple questions guide. John, Hey, your

we about is our subs talked combination drive subs well. you of and things the and equation. growth of business growth, a the important through as net Hans, of add the to opposite side obviously ARPA. certainly growth, the As all really revenue, think X% service account will But it's do expect that

in place. we'll because where, on doesn't billion we're know significant efficient. to that won't as teams change very at business those. doesn't mean way. the goal ahead to we growth. a that We're make our we that as you to We as end that. savings just to should of But going growth, slow ARPA program will then of margin put mean that in us the you improvement, cost opportunities all -- is continue achieving $XX hit There disciplined won't well expect -- billion continuing with timeline close chase the And XXXX And us from business but are we not the mentioned, the do see The well $XX volume more it the growth unprofitable in focused stop. to down you

in the year, think is, improvement, big be we then which The that. certainly of you'd you that about to have cost thing we a if EBIT of dollars, would an margin. of an overall I be the as activity will say in increase we margin with margin see the this glad picking economic driver And see one savings. revenue an you combine that obviously, As up, improvement have EBITDA indication impact equipment revenue would

much from for grow, the just you of could dollars on not grow we But of as but the the we're have focused guide impact year. So equipment have revenue. and the and with on side the certainly dollar excited margins EBIT the equation, much because numerator very denominator that

John Hodulik

Okay. Thanks, Matt.

Brady Connor

Hey, John. Brad, question. next thanks, ready for are we Yes, the

Operator

Thank America. next of you. comes The from of Bank Barden David question

open. line Your is

David Barden

the that I have the you the And for the of side Verizon? would look you. second on Could for that unit this as of HuffPost. a What comps it strategy then, might on what taking the the is business. of the be XH Verizon questions. on you Is for much term side Matt, of might Thank I so game the tough question Thanks you numbers elaborate that 'XX a guys. Matt. dismantling the Is the the Hey, with for some bit Media business longer beginning the plan the might think Hans, for little out first of just be like? guess the kind guess question we sale what block? and business? called for

Hans Vestberg

Thank you.

with want the I'm consolidating And turning bringing just including On brand some, not XX changed I Media privacy. portfolio. resetting products also clear journey one. remember as somewhere mean, a I sort this done of decrease platforms if to outstanding went the was have job. overall to and very that. sharp XX% The an started out product in going XX sure into to to they're we growth XX% or We started started the in this value XXXX, ad from now around Verizon just We down extremely with with per it they Verizon tech of of different quarter. We you We trust team Group. has strategy cost. Group, that Media a of take

I think great. it's

that them are put in have a we We position with. happy really

So, we are wanted position and will in where to it these I'm the now looking for execute, guys be. how I

Hans Vestberg

on David, the then, VBG on your question And volumes.

to Business circumstances So certainly, in what some the of year. as Group, very, seen especially that think Verizon the the is that public across you year, this country. due of we've very strong part sector about seen Obviously, we've

that the of actually if pressure would the That on year. would our happening well. in very very as volumes happy our some of businesses very we good things elsewhere supportive be mean supportive Consumer were I would half saw be second those So business, of SMB

of volumes. the But just public of uncertainty of I I Business that side sector than other on the expect, our parts part think we see the about -- the the wanted certainly, to be the impact by Group that say, some So business. would that of there offset as Verizon think as call we out fact but see it's year, improvements exists may some if we the we more

macro seen expect environment continuation 'XX we you very is what in consolidated results. have the can that together put so different how plays So, and of as saw we in what many irrespective strong we you've out, of business, XXXX parts is what a the of

David Barden

guys. Thanks,

Brady Connor

are Yes. question. next ready Thanks, Dave. for Brad, the we

Operator

Craig The question Moffett MoffettNathanson. comes from next of you. Thank

Your line open. is

Craig Moffett

wonder could for wireless moment. the competitive I if about Yes, hi. we just a talk environment in

Your remain, Consumer but across especially additions gross way Business, Consumer, down. in and

XG your see of as of you sort we of evolving sold last acquire that XG perhaps the a just of for talk handsets? subscribers. could the what I -- bit more remains are the clearly to signs of that which talk if and era but competitive you and seen more churn being handsets sort and in years, intensity, about your about a good story now moderation speaks to for particularly new how Your of are weakening That's a than ARPU wonder that it that we've different improving. ability very rate a few shows

Hans Vestberg

Thank you.

always competitive landscape the all, I also think is of equal. there First and competition is

network, net have offerings last bit exactly And important. as we likes that are very of X.X our very, a done what you quarter. our the we done. think in experience. important migration net we us I that all, our mean, see, is likes quality customers in just very adding can adds. little and this if you you I look what different want quality adds have with first what for that's that strategy. We And years at an that's fourth have the we our story, see impact And

guidance well revenue growing are as service for next our as year. the We

all traffic the the have the we'll revenue, also lower strategy on quarter that of that. So the true switcher fourth was we or XXXX that and same COVID, vectors that we with. we the And during the grow. are think of and get have with be not might five Matt And But that confident with can gave have, the with X% that's we gave how strategy work it's in others I due the part wireless GDP we and that model confidence plus. plus to to in have, we pool the all guidance growth service have less we to

in but on. we -- create Matt? net all are So very all, and high-quality can continues the that that growth additions we with we are pleased getting with that and

Matthew Ellis

of the performing that that numbers very, the well do the of side through to see. the retention network, anything Craig, and quality Hans. we doing quality and very not the of customer Thanks, retention Yes. you the I experience drive think type business of that having are additional to is

story and to it's that we been very strong continue. expect So, a would there,

Craig Moffett

I and different question because I Discovery. to strategy if just to clearly could, you're And could wireless, But your and wireless. video wireline quite Thanks. if be topics. in Disney more -- squeeze with seems change now sorry In one in and

business to more Switzerland network? make will, it for raises third-party to wireline sense package, you currently the stay where dealer. arms if aggregators, the would where the sense across any playing Does you're of have still strategy sort it Fios. similar for of offer I a sort wonder in selling direct or video your as side, about move you questions if it, make You're you it to a neutral

Hans Vestberg

first you're No, of absolutely Craig. you, Thank all, right.

On our the great. wireless side, strategy is DXC

else, and cope we to comes We brand have can this. that a with nobody it when platform network, and distribution,

to Music. are super But to discovery+, We want the going Apple sort not or work the with that of different XXX type A have are offerings. brands we they of Disney+,

upgrade that these of it look to will to our and and see customer willing are migrate. We base, fitting for both into that like they're they more

So, continue we with will that.

we this with & to course, the have our And the But if On Match, or us side, to now. I also will ultimately, choices. right starting Fios customers starting want I want seen shop continue you’ve with Mix of video because up should at they able or want quarter them the they choose. again. to choose over-the-top, If want they a And be look numbers in they DXC to it. want linear fourth solution the the

never our and X.X in financially. mean, a think customers. grow Verizon we in I thought is for to have catered we to continue that meet that And before. our That's But customers ultimately, us just we about is the it We Fios for did I video needs. good do Internet setup customers' to things whole the decline us,

that's have what that have. what division a We we we That's Consumer and see you the in in the see consumers how to numbers numbers. about are you delivering thinking now

and have Group. Business Verizon in what before. and we bottom well. working. same to pleased are and more They we see, that to the is be I the strategy to hope have you different bring pleased to do be are with I And even things as say, able the mean totally scalable have more line. still We platforms you more done I'm have But to guys, thinking I

five the have growth. of vectors We

into on the you going strategy have proof asked those all are video points XXXX, about. five, including we We

Craig Moffett

Thank you.

Brady Connor

Craig. Yes. question. next Thanks, Brad, the ready for we are

Operator

Rollins you. Citi. question from Thank comes of next The Michael

line open. Your is

Michael Rollins

morning. good if questions, Two and Thanks I could.

versus fiberize then local opportunity in step that any the retention? the what network pandemic take Verizon initiatives that churn wireline year-over-year, tiering function may you're and be business, look the secondly, be that portion on at margins coming and the up, what's the point factors from on you've improving bundling you And strategy, First, content from improvement the is of there if postpaid a can doing to switcher continued as lower you coming road pool you unpack Thanks. footprint? the think at the to the or especially other some down might

Hans Vestberg

XG some start will that we They let a well. with than are offerings the to same distinct they or our have the anybody I premium and we can XG Matt just postpaid on with Disney+ go you. and the and At Discovery+ comments Plus. doing and Ultra Disney+ in having different as Thank Plus, else so unlimited make churn, our I network market, additions love with great think But the are together and time, will the we're or Wideband. moment where our performance customers. the

Hulu We included. have ESPN and

should, them, ask this. think you I has pleased you I things market. how the in partners, those think very And happy nobody at of else if we least type can are with our deal on and

Intelligent building the a We were the from Network-as-a-Service on a with which are this, it, side. that we're idea Edge retention from We both is but also Verizon money happy with on whole bottom-line Network. the making

you set idea fix invest or Verizon investments to everything in centers, a And system, mean, in in think in year-over-year. the call is On of deliver I over time, of we we customer new to really opportunities, that think will, time. a the we see Edge things good or a Verizon like at margins to month And direct-to-consumer, want are our XXXX, doing need order for working look That up wireline get you nothing This side, Group. Business I still quarter to Business Mobile to in Business Matt? them, where Compute. side. the to it our these then performance we two. over is that if whole was a that the the is platforms billing that This being Group scalable XG I add improve get that

Matthew Ellis

Yes.

The the also a that pandemic Hans out certainly, churn, for is on a churn Verizon a -- mentioned, just impact. too. the the So but quarter of specific contribution, lot back point pieces there included I'd number second. Mike, fourth postpaid as

on. If was a think all those customers, a through delay the Connected there collections about going in the customers process so you Stay way and

XQ. you positive a do, and a And bit want churn with in and XQ, of best you of customers number, up confirmed network. else even a a benefit with strong based so, QX it's in by from RootMetrics But just the that, catch on had Verizon that you little get that very to the everything network experience When as who again the we put stay network yesterday. together Verizon on saw off

Michael Rollins

Thanks.

Brady Connor

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

Operator

you. Thank The comes Doug question Credit from of next Suisse. Mitchelson

Your is line open.

Doug Mitchelson

that of I'm beyond you. XG prompt factors it tell kind Thank the XG that quantify you then it Thank them just would super much bit just normal adopting lack delight on lack to not lot any of of of is I slow evolve of the and be or so of for due be. being cash one, over swing of there way historically year or the retail in to bands Hans, was Matt, of get for the or would hard working curious, much. super something you and And capital? think that’s pandemic as and free -- walk, of consumers is, hoping to people It's think really arrival to just applications XX United a sort happening size XXXX? around flow two upgrade any to I States Is how getting I'm And to or quarter? reflect you wondered not in the a working three? for the having curious United but iPhone there a I versus what going States. next cycle a sort is to sort people consumers how a way XG just your the thought capital, in of it bit might cycle the going of or exciting back the all the start other a in and looking and the

Hans Vestberg

phone had fair or we When in the late the mean, that our users say, would about came what's that's remember share what big customer devices as to in on, the with migrating have a also when this would and we happening I time so upgrades Apple started, all XG Remember, and fourth at I quarter, of the out, pandemic. I a the share same Still, very we with say XG. base. we are seen we’ve our Apple talk pleased

think but upgrade and subdued, normal, will XG I it's better. pretty we normal a little bit this cycle mean, So maybe that's is per the constantly. what's improving will I remember about I second, now Wideband Ultra when talked one happening. network, I to And see. some that our fortifying we're reaching better just four, I up performance we mean, are very five. that gigabit we're getting maybe

better. And performance to the our more so nationwide, there's the all goes improving much So time, do. same for

and and coming as accessibility out to XG have think Wideband. with So, Ultra is much that all of a the more main phones brands coming are together I phone all them the

So, that customers there see different into to 'XX I cycle. I think when But than to think it today 'XX. this migrating to are new XG phone. very cycles But continuing is and comes that longer no will we They're it. attached

I else. XX the some is think that we about my that. clearly, saw equal nobody so I But I are talk remember refer memories going years we faster cycle. are It's happened myself our the when short, than just in actually too to, better so we XG XG so that -- memory, than is to which this don't ago, what cycle this

Okay, Matt?

Matthew Ellis

Hans. Thanks,

earnings so earnings line starts with Doug, higher question, factors, it cash obviously, be largest the will the cash the on, Above the driver flow year. talk XXXX. you flow obviously So the swing for when the for in about

we of billion obviously obviously the cash to would had to from the a last year in terms cash taxes. other one-time way $X.X tax potentially that flow In benefit won't quarter higher higher that expect addition things go the repeat. standpoint, that, earnings But will we lead second cash in

the flow. be biggest going in on customers difference cash are working as contracts doing device the will is Obviously, the volumes we working receivables go then well. down as side, year-over-year payment handsets. item goes that And of in say, a So amount be capital the predominantly with capital, you in the to as down,

don't this even So, see year. you volumes year-over-year, the year, if we that an uptick tailwind in if they're have removal from flat just last of

offsets all earnings key increase the see higher So, taxes side some on going from be with the are the cash all, equipment receivables going you're factors in and there. in hopefully to from to

Doug Mitchelson

you, Thank right. All both.

Brady Connor

we ready for Yes. the question. Thanks, Hey, Doug. next Brad, are

Operator

Bernstein. of Supino Peter from comes question next The you. Thank

is Your open. line

Peter Supino

could expect if I more do service incremental that revenue revenue specifically service the Consumer, of normal -- be you less or to morning. a good How Hey, growth characteristics any the within you revenue level margin the of service wondered that profitable you discuss outlook, revenue? than expect? and

Hans Vestberg

looking think that as as is I recall. growth. for that worked guidance long are how was I And outlined profitable XXXX, has for Verizon we -- the

well. been my group profitable is but in work Consumer that And the with Now all I as life, we here haven't growth.

as that if we as see and profitable both to for. manage profitable We will have it's able looking will to making a we we're best see our the long-term offers effects. a guidance, same that's get P&L it's and aggressive, needed, growth we But the grow as guidance. well in should time from We the be customers at the and for you that our growth will can be

Matthew Ellis

Yes.

guide So, is guide Peter, that's -- I X% the in driving well. is the drive revenue EPS think exactly it. plus that's growth, going the If service to as

certainly, profitable growth. So it's

standpoint customers. step from it components In the up doing customers there that incremental different incremental lifetime also creates is But terms I time. historical revenue absolutely, a obviously think of comparing all we're to to everything value those revenue, with

continuation over best-in-class should how marketplace expect in for we to we provide as significant that you those customers So, that value the for long-term economic and changes it way creates us that a do mindset. of there our on, be the customers. we bring a we approach Nothing in experiences

Peter Supino

Thanks. explanation. a That's great

Brady Connor

Hey, for question. Peter. Thanks, Brad, got Yes. more time one we've

on more, one do line. the we if somebody have Let's

Operator

Synesael question you, sir. of last Cowen. comes The Colby Thank from

Your open. is line

Colby Synesael

you. Thank Great.

to expecting circle in 'XX. if XXXX year And in want a were expectations, up CapEx moment. feel messaging 'XX look for Just the at in be I versus on you indeed back Street like that CapEx earlier to be up. would was CapEx they

to on So, huge flat think tax might have changed a how to guidance the that the XX%. to CapEx what corporate kind housekeeping, and free rate increasing be you get I'm you cash Biden just whether then proposing year-over-year? much as be is And have that trying would increase? is you. Secondly, that impact offsets of curious I'm have in think dividend coverage? included able sense a do that Thank your that would there about flow TracFone XXXX absorb of will a to guidance? you Or just and

Matthew Ellis

Yes.

year. guide, books. So thanks, outlook I'll the there. do significant doesn't XX% expect assume year. during will we what is the of heard legislative is any while it the Corporate on reverse close if few where Obviously, the Colby. second XX%, the Maybe our our years. as impact -- on the assumption, order the TracFone We that off in But go based our in to the year, that's half of guidance -- in last necessary, taxes, to we update during you EPS we've we been

ago. forward, at the very we And so, changes works We the had higher number that new rate to on now. not many in had how going that right too the we if a dividend there seeing we what's it business. a forward confident issues. are we the way will And we But of Look, do obviously much coverage when look based good on look administration different about years the appropriate at we business tax talk time.

do what XG that a efficient see things. current And That's all the whether at certainly terms the we creation, growth that within very line set on build. is is our up rate of looking that the is capital think how done, deployment we've certainly LTE, in economic the So the why we and believe in you a business we things I different comfortable in administration guide in as with very Company. that's seeing CapEx, to helpful as while been you're creation are has continue model year-over-year of be very job

this You build for fiber Ultra the heard about Wideband goals Hans build talk our the year, continuing out.

got And going so, I think good the a team momentum there. very has

those As the continue, they've it got guide the see why into where efficiencies things, is. you that's more

Colby Synesael

Okay. Thank you.

Brady Connor

Yes. Thanks, Colby.

it to call. we'll and Brad, over the hand me close back you, Let up

Operator

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

You may now disconnect.

Verizon Communications (VZ) 26 Jan 212020 Q4 Earnings call transcript