VZ - Earnings call transcript Q1 2021 | Verizon Communications Inc.

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Operator

Good morning and welcome to the Verizon First quarter 2021 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. pleasure the my your over now Mr. host, is to call turn to It Vice Relations. President, Senior Connor, Brady Investor

Brady Connor

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

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

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

of of first licenses. quarter, basis. earnings approximately item earnings to look a GAAP take loss a quarter from reported at consolidated In wireless earnings sale we related let's million include a the first $X.XX Now on first the the per for of $XXX certain Reported a share special pre-tax quarter.

the quarter. approximately million million learning impact of the item, we units, income was distance was $X.XX consolidated X.X which effects the included recall some during within approximately share in in process the programs. business the quarter. $XXX With first the share quarter, and per us adjusted impact Hans million included Jetpack in The and quarter. split the enrolled over recap reported earnings in segment our now within call million per earnings April $XX special of a operating a first take The through first announced X, to impacted I'll $X.XX customers in that, for remaining adjusted between this On Excluding turn the $XXX to consumer. overall was

Hans Vestberg

and this first Brady, quarter call. all Thanks, of devastating year one the COVID-XX. to to more mark We since earnings welcome than effects

is we're a stakeholder vaccination, see significant all go this have executed And to sentiment as when balanced our for and stronger before normal. worst during said, I'm customer we the proud Verizon this as how lot there of recover out While back progress period is we in to responded a our still our during strategy. economy, company pandemic, Verizon I on the come will stakeholder as period over. has

serve XX have stronger with compete and our today, progressed we are position customers. employees, in already And that last the than and added we During months, a in assets customers great position. stand to an ever strong all market our

strength head partner by we mmWave through XXX Day, and strategy, Investor Looking differentiated in we combination and back And great position strong average businesses of our C-Band megahertz the quarter, position industry for accelerated time of on of the for out growth We our team, we as growth this cashflow. a strategy and and amplified XXXX and diverse in all laid nationwide service mobile us C band. strategy and Verizon our as we in And models, go-to-market working. our our is both XG in our since on unique a our the places work a network achieve a had brand, our COVID in XG EPS together in of X.X. a era, our to beyond. On in the all network in place, all five have network great quarter vectors execute edge foundation opportunities, leading leadership confirms have the strong progress we foundation. of first to our targets leadership, had With a that, the compute. launch XG top made with the all and that and together start growth ecosystem mobility platform provides growth clear a all with post of which We and

about the talk highlights from me first some of quarter. the Let

deploying – market, our to Our I the assets of things C-Band, continues team a team before well have than network leadership. XG network as more ever this accelerate in fiber. lot XG, performance confidence as mmWave, network do will great the that by leading and

quarter. with Our Discovery+ and to quarter, with unique And in well enrollment exclusive that rates in was with and continues migration to premium seen model we've the launched and most Discovery+ the so like Disney+ pleased the the match unlimited as deliver the on unlimited building we're far. earlier mix offerings as current recent the our

such XXXX. this our be telecom carbon net the industry. most in responsible quarter. the by in as and company us brand Verizon by set valuable the innovative emission continued Verizon, Brand ambitious Finance Citizen brand. Our Fast in business Corporate Responsibility Social commitment Company recognized Within the was as recognized to we goals, earlier framework, zero ESG, as have standards most the sixth to

on the longstanding earlier States. ethnicity this United pay XXXX Our race gender diversity, and the globally we focus inclusion by fact week, is equity report. and also our we that And in by XXX% equity by launched have ESG evidenced

XG cities. home in the on to and with targets more recently Associated for private have our British And mmWave XG on European operational XX high a level deliver track XG to XX the come. brought several first Ports. and the We service year. We quarter We mobility on live. we're our additional continue signed deployment fiber and with XG cities currently We to deal of

AWS, our with edge private XG with to computing edge our partnership expanded We and XG also customers.

and service markets diverse of a new our a set We network verticals to continue partnerships. through scale strategy across as

and SAP have partnered create retailers to such with data, you University real-time shared brands as State Arizona Investor edge Day, diverse plans XG to continues we and retail Deloitte with provide commitment deployment, operations We and innovate platform immersive our to with autonomous, the verticals, our and will and leading C-Band build to digital Ultra At and learning commercialize which progress connected Dreamscape training. well. and Wideband Honda that across computing for and and

deployment invest to further Castle of with our and on providing $XX this look updates to forward C-Band CapEx Crown the to signed integration year. C-Band build Our accelerate to throughout the the into incremental intent deals is We SBA recently capacity on accelerate billion status network. and our

deployments XXXX. We for of suppliers operators first And the total tranche satellite have network of track needed fourth the of the in already on are quarter ordered to equipment XG and the spectrum. XXXX support half C-Band spectrum clear third to our between from

Ultra edge Fiber sites. the In QX. And XX,XXX date, of One continued expand and to We to year. sites backbone in addition, end close we the on new reach we Wideband air to strategic Ultra of were our demand coverage we as intelligent have on and have formed Wideband XX,XXX our miles. we by record discipline. strategic strategy this to low we deployed X,XXX expand the continue We long-term We view of investor also rates financing to our deployed more pleased investment. the And to and XX,XXX supportive achieved than this with deployment network, date, our fiber financial critical route of track

financing. proud Lastly, we of as firms also to $XX roles billion and very were the prominent diversity nine to part offer financial inclusion

our our investments earlier, outlined three of and are in growth I As revenue generating customers our groups. operating solid across all network

Our their X.X% quarter unlimited all year-over-year of the year. momentum. our in higher continued the fourth revenue, Mix Match last closed QX plans performance QX reopened. stores Ronan success X.X% that to and to from drive uptake wireless growth & now And in service have I'm team out up in excited with ARPA, of strong almost see and supporting

we growth years. quarter adds Internet Fios Fios in addition, net with see the In six first solid in best reporting and

top of me the With meaningful provide Matt year-over-year Media Additionally, insight Group line. continued the quarter let that, quarter. including Verizon contribute some second growth of financial ask the to on double-digit consecutive to the first deeper growth, to

Matthew Ellis

everyone. And Thank you, good Hans. morning,

prepared exciting has strong off am to to based for transformative on an in and financial we're period that the excellent and start our our I Hans quarter As pleased truly his first the a operational mentioned report performance. year been company. remarks, for

and seeing services. strength revenues are We business products five traction demand driving vectors, across all continued in with growth our of our for and increased core higher our

advertising High throughout wireless across and wireless in positive Fios X.X% that were first momentum revenue our acceleration fourth that confident revenues, in activity, by trends revenue from resulted service service strong and year-over-year, quarter, first Total billion, the the delivered quarter. will deliver was In quality growth consumer, up growth in we X.X%. we operating media. sustainable strong year-over-year equipment recovery digital are of the in ongoing $XX.X an marketplace growth, revenue the quarter momentum, year-over-year up year. exiting business business the recovery highly X.X% actions revenues the a consolidated results With the wireless the and excellent

information were up schedules broadband performance Additional supplemental and Fios in earnings financial on strong and volumes revenues details provided by wireless the quarters. in X.X% recent driven total website. on release operating the our are Total the year-over-year,

our the maintain achieved customers. network years. value of lead and year-end the we our expand capabilities. and well and portfolio end proud services our ahead our target. leadership I'm team's and as continues of of billion, extremely XXXX enter the mobility Our over cumulative to to of cash Excellence At past first Program execution And are we broadband delivering and new offerings positioned we our products savings broaden the three goal of markets well industry, quarter, position the $XX our Business of to

We from procedures. the we've benefits systems forward moving operating additional improved our ways and will realize

our opportunities impact adjusted guidance. adjusted a giving Jetpack billion, business, in As points strength segments additional growth the for revenue reflects our The across our margin over this the basis The capitalize relative the X.X% highlighted during year the quarter, with disciplined the previously, beyond we've XX EBITDA our $XX.X while us X.X% recall the core and to EPS Brady business prior structure year. continuous of three quarter EPS strong and create to represents adjusted had EBITDA which will quarter. performance a focus the full-year opportunities basis to of on in excellent the best-in-class fully sets first Verizon marketplace, said business for $X.XX. cost on for delivered adjusted at growth the on momentum combined savings program. we stage The the of

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

around broadband and our unlimited proposition & value continued our to Fios This quarter, offerings, see best-in-class Match we excitement Mix capabilities, XG services.

customers. adds our of had All of of X.X X.X with differentiation strategy, activations part customer wireless, the to made the postpaid our approximately drives with we deeper is for last and approximately of year, million same compared and gross million upgrades. quarter, relationships Starting million which up X.X up this XX% broader period total

promotional drove quarter we The to Beginning our for a saw producing environment elevated allowed of our cohort related net momentum First of of by which levels Not of net in-store phone XXX,XXX, store COVID in included positive positions month. closures quarter wireless to quarter. Keep the innovative almost and the traffic. America were volume surprisingly, Early with March, seasonality in our strong March, second losses combined our of all foot of be limited safety best the in new approximately March saw again improved us protocols quarter, COVID the disconnects last the well our program. for sales phones adds tempered we offers major XX,XXX phone Connected open. stores as in

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

adoption resides postpaid with will XG associated adoption further benefit with room our and the base. X.XX% consumer in that continue phone churn will and unlimited XG of which grow these expand XX% QX customer currently our alongside to We our of of premium for retention at rates, plenty our differentiation they the rates efforts, penetration to and which have phone plans strong believe quarter. remains

rates with strong of posted balanced six of and well first Fios levels Internet best-in-class to retention reflects our quarter to approach XXXX simplicity performance as strong customer of quarter with Turn a pricing we Mix consecutive the and as NPS of adds continue take adds products, & of unmatched leading take customer which retention. consumer net of cost broadband to the XXX,XXX well the best-in-class the our of quarter Total phone scores, This quality growth We high proposition, for provides our third effective XX,XXX. Fios Match performance strong net into with ahead our network in value and and XX,XXX, around Fios, sentiment the excellent was first product our best performance years. structure, both customers optionality. positive internet

operating move Strong our levels. premium international quarter X Internet the Now This unlimited in consumer drove of let's to revenues unlimited increase driver $XX.X consumer major higher financial comes The billion. the $XX.X Fios phone the to as at and of increase X.X% to plans the activations Travel X.X% even billion. adoption volumes remain revenues billion. discuss quarter slide for X.X% revenue the increase performance. in revenue service subdued and to $X.X in Pass The roaming in of continued were growth over our consumer the drove wireless

continue quarter. revenue drive XX.X% margin experience we to offset basis and increased secular While to to performance that year higher prior well continue us. had quarter, impact of pressure Jetpack revenue costs, trends, the XX X.X% EBITDA up The more down solid to approximately combined points for for the our recall, the points EBITDA with margin shift tiers as Consumer on subscriber EBITDA which segment pressure from due a volumes, was broadband drove equipment basis speed associated than which video in and XX growth with revenues will billion. $XX.X as grew associated in the

Now, on let's move slide segment to our Business X.

continues applications. lead from of their team some generation prior Business days, XX towards on XG. referenced private Hans announcements accomplishments BXB and to MEC Our the industry including next the

to an in first branding our us customers ideal customer of of adds were their Being much XXX,XXX, adds. puts of Public remains Remember normal year-over-year distance of technology Postpaid for in strong as launched learning businesses that benefited position to of choice. pattern including business local continued Frontline, from advanced leader as variance more COVID progress we programs settle sequentially, wireless network X public to last total and million, partner for the in Business as XX,XXX purchases, be with and with market of activity. in QX even for trends the in into our all the Verizon medium year change buying XXXX. of addition, they improved demand our phones. Small the our a we quarter for other strong, and first digital bulk their environment. an gross responders. trends net related make the In for wireless team deliver position improving momentum transformation share safety activations supporting groups continues providing net sector the

for not March, in encouraging see as sign more rebound. benefited the only volumes volumes reopened an did SMB well, stores lift, a early As consumer

customers Our phone was XG. of transformation point quarter, digital unlock churn improvement enterprise and of team in year. basis Segment their continues prior the postpaid an in the to the potential X.XX% over assist X our

strength performance of reflects Our network, with services provide. that our strong suite reliability combined solutions the the full of churn we and and

growth now high slide our wireless segment connectivity as segment has the demand margin into with a billion, the pressure segment EBITDA since X.X% in year-over-year. performance. XXX of points Business impact the service of the up about points. XXX Let's to This transformation pronounced by in The basis was Verizon Business for group. the year-over-year, Operating healthy highest reputation move revenue the and of recall basis structure. $X.X margins approximately offset of quarter, down growth Business brand rates The had EBITDA Business services growth translated more the segment, our X.X the success in growth wireline. business for mentioned Business XX.X% to reducing strong Jetpack creation business secular our X.X% review process revenues highlights on earlier reliable the for XX was financial Verizon

driven Now, revenue fueled up year. was year. prior and was high continued customer of X% continues trends, second high XX and with We quarter to strong slide in with active grew XX.X% strong Group our revenues. to Total quarter including for strength advertising the users owned Group. growing grew platforms. respectively advertising by XX% same performance and the our as to by Verizon engagement engagement let's Media Media deliver growth consumer approximately XX%, billion, move daily in DSP the operated to in from last year-over-year year consecutive a quarter demand discuss from brands from our on period double-digit compared the growth. Verizon ago, the and finance, for brands XX% sports saw $X.X Revenue XX% Growth

now Capital we billion operational activities activities, totaled from operating year. XG approximately This network. our $X.X growth rates while million management first as up our year, Let's move the C-Band to XG $X.X to items. quarter slide liability net from network, from on results the related our LTE and continued for lowered capacity on driven Cash from prior discipline flow $XX expanding for reach which XX. Wideband the flow billion, borrowing and traffic spending quarter our billion last by includes benefits of totaled cash $X.X Ultra approximately our for support the continue

very FCC $XX As XX the XXX. flow We years, order billion year-over-year. $XX US billion, C-Band of offerings. free from the The QX. of recently for X.X%, benefiting quarter dollar and funding spectrum in of quarter Auction billion in completed at we these C-Band a in average cost first this was $XX average payments result, raised weighted record addition a in for our over the achieved the raised attractive the billion cash was books purchase, we made won of finance for XX% $X.X to borrowings up to To March, maturity

as the of allocation be critical investors. to and We leverage times. that quarter unsecured policy, to capital our the our delivering end their ratio exited our our levels business coupled result our by cash our of commitments capital agencies EBITDA is we on the year. of a operations The the adjusted success unchanged. approximately held X.X was spectrum net our $XXX.X purchases considered rating and record the debt disciplined are delighted our in on consistent markets Based asset assumptions, net strategic credit ratio current rating with and the with to times of to debt net unsecured made expect We flow approximately X.X billion track

We will the pandemic. our evaluate economy based and level recovery of the cash the developments on balance with the in

review targets XX. let's annual slide our Now, on guidance

to expect to related call mentioned Hans XXXX. billion between last turn for provide achieve we're guidance our As from quarterly we on the from year, on Hans do updates billion now our the opening material our earnings the spending for earnings in year. capital that, month, C-Band the C-Band for this for We $X back share calls. Investor program his the XXXX, to will unchanged. will to over remarks, I comments remains our our $X guidance Day and be With of we impact expect expectations Reaffirming track to to no per remainder adjusted which discuss

Hans Vestberg

Thank you, Matt.

sum couple a this up in of buckets. easy Let me

First our is of strategy unchanged. all,

We're our With they commitments and good I to And deliver we're to the deliver position over amplify accelerate with going C-Band have I and focus financially. I I said that that that strategy, accelerate that see it both as of that focus required. that. and multi-purpose hand XXXX going is that, Brady. team growth. to going on network on were on going vectors the And Our including feel We're the about our will earlier, to we're five clear. to really our operationally

Brady Connor

Thanks, Hans. take ready questions. Brad, we're to

Operator

Instructions]. [Operator

Your first question Hodulik from John comes UBS. of

John Hodulik

some a pricing it net then adds get your your in thoughts last do to of return over second process new the sort very competitive some growth we just potentially secondly, nice affects any continue there's acceleration. money like funds spending I and phone early into of there, or laid as and is landscape from But the your you stimulus expect those federal of massive to or developments view now looks deployment you the can competitive in of two. think of that you quarter. Hans, realize slide the the infrastructure on on out yet. deployment? the we're whether maybe Comcast here sort And in aren't of postpaid capture a amount next Verizon flowing the rules terms broadband other in From Wideband Ultra the position heavy year

Hans Vestberg

have case the we that. actually and to in then can light quarter market with we our open. in as port seen ratios strength the the And do you yourself, very continue were a our we On saw is But beginning been the the it mentioned, quarter, the situation, have growth a that closed, a of it's I of it But that are model, competitive for you see good bit quite competitive while. in winning Matt of our with quarter little businesses stores a because proposition, end in we and was a and our that all stores we because the as & with of et in also, cetera. Mix and the especially sort the saw model, any our unique in side because, Match, consumer on rate the growth have value all

believe look to had going part second we as we the So, of year. Investor year. the good to second and have the we're And the second we Day, when of a quarter forward the said part Ronan

is it. and so we quarter what seen about Second to us far good really feel we've where close

the up, strategy again, that. an and have really the overall we with is that order consumer this in working of to migrations all market So, address step for

we The it. doing about in team good So, well. is feel general,

always quality well. had actually good this a because know high can as customers. we the we saw with lots And discipline. out came We financial of market You we new capture do promo we've at

stages. this as infrastructure, the On in is said, the planning I

not. have But I and telling hand, on divide. is digital affordability are course, hard is, administration that that or it accessibility, true what three it's – the US, were There traffic they think all. the we even working usability worked if They XXX really to deliver that the comes the So, networks, to moved though issues the around. when of COVID-XX networks and buckets to are at say to basically accessibility, the no I in we countries address during could the other this recognize were well. in with And major

to that I advocating and network it. what then So, think in sector continue private are want invest we that government we of having work the the for, leading affordability that charge and with more

all have we that the So, for customer meets plans in needs market. all different segments

that's So, for That's well. regulation for. price as it be what think any same that We we're advocating the is to – would don't [ph] market. counterproductive BRT will the as be advocating

it's competitive on. more on that Matt, and the been we're approved advocating any has we right. submitted, be general, together should It's a early at very think So, comments what but plan the and in landscape? least with again, not BRT ourselves

Matthew Ellis

quarter. The you I No, Hans. strong the add only thing of to momentum mentioned out is key other I'd think coming margin touched the the points, on you

that start in You seeing promotion the month add customer on in traction the that promotion addressed the we We're early that that. we addressing put in days past. a think of pain the nobody innovative that's at is that good else has that with place an the point of

you of nicely When with up financial it first that set for quarter, saw the XQ feel add momentum year. the performance certainly in the volume good on was the heading the about So, and in side. we the quarter the rest into

Operator

Flannery question from next Morgan of The Stanley. comes Simon

Simon Flannery

be Internet. a You've into sustainability just to in seem of on of Perhaps the marketing demand. to maybe this insight got of Is sustaining But us home. speed up-tiering you happening And could XXXX into terms that quarter another incremental great XG that. the with broadband a this that Obviously, strong Fios this share? there? Is And little was related you give bit what's year year. opportunities? with

latest what's today? million should through You've XX households. recently. know what the announcements had to a we're of But year? here ground on the headed the I we number Thanks. And expect

Hans Vestberg

a to Overall, good Fios, and think us expand course, is on. I broadband of for in demand our had Yes, we Fios again. quarter high opportunity quality the great

personally that for continue. think continue. demand I broadband this The will will

We in XG me and recently. deal going of tremendously And that trying with time. are and a and all great post is because when or wireless we Home we mmWave help using of the are C-Band revolution which to with total is how been COVID. we've sustainable markets also that have Home, And advantage is fixed And some is technology, the starting over others a as we saw it broadband. come for we just to an to access. that scalable on that era position. very And do up home XG we to And adding XX we're as long now to to XX know any well, with

now. right this on fire on we're So,

all And a with from beginning that. to year, our when very comes the developed comes, going in IPRs Home. in big we're add service. our even embedded that do having more all it our C-Band belief the our And when to later ecosystem a to is own grids on great the then, work XG to how and have self-install, sort We to the from how the gets on and do opportunity how of customer see mmWave a we fantastic have coverage

we the full the a package order is that all, country. bringing have broadband for market to are So, full all scale in a to in this

side right on XG it's as Business Internet Business called But the don't well, think it's the absolutely the side. I forget, on moment.

the same are We using methodology.

are our strategy we on We platforms time. the it. and the scaling goes that had doing we back for same address to all another It market with the

units you how quarter, growing. see we we do. with and different and to fall it if it that bottom will the are to help do all in know growth. we'll service And line. But with platform scale And it the the us will bottom thinking we network scale a means have with all model. We it we have, three to we're have But And And bringing more customers. that also to this that have line. still

Operator

Feldman The next Sachs. of question from Goldman comes Brett

Brett Feldman

into deployment you C-Band Earlier this we you your March is that had your million XXX would of the require you going significant fairly to and a capacity, megahertz week, able handset at cycle. customer licenses is making least to officially commenced next is upgrade sure use covered as get by that be creating year. XX Equally that which to announced important tops coverage that of to expect base

of course What's thinking guidance the year? You promo quarter. you put as just just you cleared noted embedded ear this do until a doing new question, in that the XQ, your you market the more don't had And it XQ, to this? noted you phase a spectrum fully in of about that be utilizing are had How of March. you stimulating the expect one seems into will be over terms follow-up but maybe it upgrades expect device like then, by

there's can bit can out a the right just you do I'm deliver So, chain or to of now? supply a anything wondering just what if there's gap. close that's

Hans Vestberg

on we to to only say can on start the can the to I satellite our can weeks [indiscernible]. the six some talk partners, ago we talk employees, only we It's could that our companies, we all, to false suppliers a of start are to First C-Band. since talk

already have equipment. the of ordered We half

tower the with agreement made have We cos.

that made starting can a and we We six deploying that's And well, as clear spectrum to third weeks. C-Band and in satellite now has that this quarter we're they companies fourth of the release the reaffirmed press have first actually yesterday tranche talked that that quarter. believe they

hadn't to we had to the that possible the of are for fire experience. the to anybody. FCC as then because possible And investor have. from we question. So, as as to soon date with said flowing order the is got over great we technology day, we we dates the to much this this that our phone pushing course, on make And up when to as this best our was And said Right now, talked the a see worked we happen. that we in customers we get get as

it. value and of seen the we tells is you said, a a in unlimited phones on XG. quarter, drive it about, uptake the new we of unlimited I premium. That as to the that took XX% Matt promo customers there's have new that of that unlimited premium. a great with also talked XG lot in Matt and going And And over believe lot think XG in

believe have that we now said, continue we the in as XG what market the XG. will we And saw to in right faster grow So, what this than is going base.

recently continue we when into launched, course. And also the good also can So, monitor, it. it's that we a how have will to see been add another uptake of comes and the on it that iPad to comes mmWave just But ecosystem. we addition of that, whole

we So, And again, we we good feel have uptake we the the feel good and products about of have. supporting line about the promo it.

later it the together that's also make well with C-Band go to this So, deployment going coming year.

Operator

The next from J.P. Morgan. of comes Phil question Cusick

Phil Cusick

in see I'm I what curious bookings wonder to business the up small was enterprise if you can this And and year revenue quarter? S&P is see. you growing year results. dig to which versus great into

Hans Vestberg

most one during been Yeah, And business enormously COVID-XX actually and these a the into recession. hit simple are for all things came That COVID-XX. strong economic we small SMBs type the businesses wireless reason coming businesses vulnerable, quite hardest with down medium had that of they the lot. and the the of has

And year a had We growth we slowly have on are quarter, seen back actually over in that. we very SMB. this the in small that coming

fixed So, on meaning wireless the access. but as with economy our we Internet, the side, think positioning wireless also the is good recovers, really XG

top clearly, combination we it, to the the know that, back that I signs we're on team I have over great think and services I But base. support that. of a don't with Tami day. on working coming SMBs is with are customers immediately. top the these some we that every value-added in think improvement of of some our see

large On here think the on of the side, two side, have tale again. the we cities enterprise I enterprise

local certain You that COVID-XX really fortunate been grow back a on in the demand. have having large actually holding has and to enterprises are certain by these investment. times you have that They the are tough and impacted Then better recession.

have So, in which not our we in, rate have will mobile sort enterprise business, is of blended we decline that they go course, the the coming And giving away. in are investing is the business wireline, of right compute secular edge happening. the and the wireline But that wireless now. is

first seeing to that announcements of see are making is together We what the the quarter. every start and working And year exactly really of the Kyle, benefit we in that funnel have saw it. the building did Tami CTO, our see day are the how we this You customers predicted commercial. to with many customer year this the and team

Phil Cusick

at impact Fiber is SMB for early it One Or initiative? from the that Is Is too there enterprise any here still helping side? on them? all or the

Hans Vestberg

course, our for [indiscernible] have with on the That's was can clear. getting our side, some when we think XG remember, XG of And enterprise enterprise priorities do really and then the get It's the the fiber our network. bang we I where have we fiber. we But to them. most buck. opportunities

wireless But actually I the we and small to take medium fixed said product and good have some businesses. medium, small really when a the that's going now, XG time. have On we before. will for Internet, access, what That's have we

on some but they possibility also enterprise, to are still So, come.

was they so when to mmWave the great said, that exceptionally fiber, right, experience with can with it our XG need network on it's see gets As have building C-Band. that our the comes customer focused more and to we

Matthew Ellis

different that, once monetizing it to about just Still network on mentioned as building Hans follow-on ways. and part it of, previously, then is the

talk the opportunity we as in and same too. we Just XG, have wireless with with different fiber, the it ways, monetizing about

or investment you enterprise in to us more building, on that access customers in net a – go as past you on absolutely once than return go third-party lighting and there opportunity So, up the to have paying is for an opportunity you're enterprise create sites, cell incremental rather an those when customers fiber.

So, example again, another multi-use of network.

Operator

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

David Barden

And first of a I'm of the out property are numbers on contributed an on of growth, then I lot second advertising a something moving or number. you big of XX% revenue. what it XX% a would out Matt, Media, year-over-year broadband revenue I kind growth, those to kind saw guess, that on on going a sequentially the over even higher Thanks. pattern owned I on Fios been there's one you XX.X% know Could some and threw bigger, We we're a this basis, on guys speed of question, kind have a to wondering total uptake more of video down parts level mix growth. and of move. higher And growth in if revenue pickup. year return some guys to "normal" price the on pretty the set kind break dragging that depressed that that eye-popping strong guess shift one did of the broadband kind services, was you but down numbers? XXXX is the XXXX? the

Matthew Ellis

quarter Fios the third we If first is six introduced team quarters quarter revenue, here seeing best of last have We pandemic last what total quarter year, Match benefit in you're I consumer were initial for the first again offering. in year. into We what quarter introduced great now Fios' interrupted the the seeing start Fios really three in been quarter got starting Obviously, into got year. our with quarter first the our here, business. But strong there years. very Mix volumes, fourth last impact the Fios and the now underway. we as in started & it in of first our It's

an it that than customers ago. so, what than you've a X% And in now base means got was more higher Internet Fios year that's of is

off as revenue gigabit to step-ups opportunities step-ups But driving even & the Match you as service, wireless and the move as strong as there us as and anything we else, so, Fios. us video the side. secular or volume bringing well has so there, much created in the brought well on. It's into Mix quality although with Mix And our service well. are construct mobility, there pressures have now the working to in consumer you that's SMB very coming growth the Match combined on volumes saw, really in obviously & worked customers the based of for And offerings for

what that's about excited to very do. So, going

the for double you the up quarters. now aren't quarter, lapping On both XX.X%, side, first you quarter say, the impacted digits consecutive Media really quarter second revenue fourth as remember COVID and

momentum you about higher from So, question, what get couple you're on we doing talked XX%, is those benefit over been showing advertising of a the to And now, a encouraged not revenue as team's trends, continue to the the that's momentum. seeing and And really here to will that search of O&O to the be team's say Offsetting the one advertising so. headwind that, hard numbers do up that's Hans? there. very like thing year as have. work the be things and past years. gaining as some the we're But down your the how continue we go by The we good likely forward. you

Hans Vestberg

then work consecutive to the quarters with sort work from way And the to hard the strategy we XXXX, the and and been to products platform. started Verizon in go cut just on the the the OO Group business we reiterate now Verizon want we where start I back the costs, combined brands, growth Media two in all ad of If we And of The all reset by we again. owned the Media fruits reshaped has we see plan all that team. digits. Group double operated. immense with we the

So, actually I they to out want the this shout plan we the the just and team that to set was plan. on delivering are

So, in I great is have these future clearly a good the going have portfolio. with They important future. think we And be product guys. to digital a

a position. we're I by So good that, think in

Operator

Michael comes from next The of Rollins Citi. question

Michael Rollins

much helped made And can that to for the back three billion. EBITDA if earlier of investors the Verizon? you the I secondly, cumulative going of what of we over five how how comments reaching target about was versus curious you cost that could the then, investment of the of maybe cutting if go forward CapEx terms the like side should process And have $XX – pace next Verizon one cutting for in could cost the incremental Verizon to years? Thanks. about think unpack

Matthew Ellis

as now be identifying is important plus to we've the the best the which years going the efforts our to three over more forward, incredibly proud Look, think having going lent make in past really and continue in industry, ways maintain continue team's obviously. we us of structure efficient to cost to on position I'm

of terms billion. In the between where CapEx items you P&L and there two, roughly see is your that a even between both from. those It's behind $XX first question, split come

the transform do on of money That's come in And can CapEx One of benefits have bring going the Edge on, have And some not terms the allowed mean then, we the previously. consumers in efficiencies. That's we so bottom side, going some P&L the on the value than do contribute to be backbone that to So allowed well. them us those the continue also to as new Intelligent the been we've result but network transformation we've amount of slow years helped the us some there to that's side, just in of us for that continue as going hit some competitive also us we we Fiber deploying the to doesn't of of pace and able to the because to the as just more network Network for the you to same doing on would so see give the but means down. the have deployments target across forward, line, XG, reinvest done the to a in things of in of our continue that. to promotions marketplace, and business,

identified have has the There us. finish Obviously, the is us. line, more continuous team here. the didn't to opportunities year line through The more improvement the items And coast for news is, we lot will the we through We great ran for good got forward we accelerated tape. last even momentum. a going here, finish has

the both a capital the on we go also as will continue So, as well. business and from to of statement side forward, we income increase the efficiency

So, a lot more to come.

Hans Vestberg

Matt. just with No. And to I want agree

I we think those the those benefits making we they on Edge the it. haven't seen structure in new more even also, done. and Network, the changes running even structural group, Intelligent strong thinking – businesses, run the network yet efficiencies than Verizon CEOs seen with before with have investments But their using and are three of have the unveiled we how the has also some platform much the we have

that of cost that Matt. important. having So, constantly our can part the agree find is because best structure with see the in more is be governance means and us stronger we even for efficiencies to we that This I market

Michael Rollins

the And just does for expect financial initial give further outlooks get and on is this achieved and a performance what the goal wrapped compare the into target it updates the of you $XX now would continue progress relative to that goal, to to was? billion Verizon? Or you've totality

Matthew Ellis

As we looked at ahead three, obviously, we a over opportunity. the major four the go past forward us, years, was here, as opportunities of this

very how specific that's target. a gave we So

the three be and to work our around about think targets. will we mentioned, the But to next four over obviously It the ahead years, in this. I they are growth. of opportunities doing business. other as with I parts our with Everything we're XG As of inherent us biggest all continue will

five next to gave going targets MEC, continuing build why deploy out market about that over at Investor quickly that's whether revenue the we and the for the how then we're growth talked C-Band that be all growth, that Day the to mmWave, XG were addressable So, for Home, the we about the we total got, that years.

and we to those. is pursuing opportunities growth when excited continue drive and us forward about we're the driving line in cost the for throughout savings business. front very We at But here look top biggest everything will going obviously of efficiencies us

Operator

The Moffett Craig of from next MoffettNathanson. is question

Craig Moffett

family the its changed Obviously, your of on your just five forward? new plans four and up all way of to about offer now of the had what Comcast that family of in on you and more the sort lines. is is aggressive pricing MVNO you down cable now considerably top of talk the the and status to in Can that relationship see renegotiation plan going significantly sits the MVNO you and pricing pricing just industry or it kind discounts. the about how evolving the view

Hans Vestberg

agreements we – good feel where commercial any can Verizon. sort of details into of I network-as-a-service we have that, go our premium our what our But say own value about is strategy cannot with we I have. brand

that. us We whole then part all have the addressing Visible the for And of a idea. That's accretive. have the is and we this MVNOs and certain

have investment. We the accretive with and migrate bringing has Nobody unparalleled have new but the in relationship customers it to we our we the great we we how position all we good start and year same which have as partners. with and as doing And with premium the Visible in MVNO Verizon, and we're on then we a the opportunity MVNO about, be an them way also in have these. and partners the heard to building TracFone talk enterprise because this is you from this play Matt to growing. a me market best see later revenue and also our on job, customers, market ultimately, And return have anyone us Ronan team. We that see markets then in and we else to all

relationship MVNOs. so. I I about enterprise we with So, to feel as the We them do an will customers important good feel about continue treat and the it. good

Matthew Ellis

time. been agree long It in makes it's back Share we've with the would said. so that XXXX, bundled sense. of I of when introduced pricing Hans Yeah. everything customers, lot Everything for Look, we a idea for Plans doing a something

us said, monetize opportunity it different network Hans to another traffic ways. glad and we're to the just As the have our in multiple gives network on

Craig Moffett

ask if the Do regulatory you of timing And the in follow-up. any on and the through progress just have TracFone Washington? update could I one transaction

Hans Vestberg

is approved. I a true. when think everything And be this we I expected. is as process said, holding said from going is The this to the of event half is as XXXX beginning second continuing

believe we we think third said it's to earlier. as when it's in be somewhere the which We quarter, it's So, announced We also be going progressing expected. don't to going it.

we more about give an update So, when we know it. will

Just there. from a it's we But progressing couple of different events again, still beginning. as expected the

Operator

Horan question Tim comes next of from Oppenheimer. The

Timothy Horan

permanent fixture conferencing. rest business ago. networking And again? in in you this last And, BlueJeans phone with the go then, products or you your strategy? acquired transformed SD-WAN probably communication subsidies of Thank to talk Do Two year year questions. And lot integrated creating market? how decade services communications all. One, the secondly, industry than and a think collaboration the for strategy last I that has more business, the a AT&T becomes more you you the think, for and you. well of bundles go-to-market Can obviously, more maybe, after are is UCaaS a about other obviously

Hans Vestberg

what the first all we our competition resonates On have cannot seen promos strategy, about is it with the the that. positioning comment, you the and migration comment our coming we're our we now feel out with right doing. how market. actually have We of and good our customers, path address on I

see going you're So, I anything think don't us to that. that from like

it we and in collaboration the time, asset we are partners on with are integrating BlueJeans this is new acquired great scaling now day settings, as tools, all So, every a the and it. new that right here we because

So, edge need really and mobile et still or cetera, which the that going the XG good feels to communication era area and conferencing, whole compute we have is services. video

in where working that done So, great to the Tami customers there. to there right market. migrate into want we offerings more and have a solutions our and be are a SD-WAN her And is now the we lot that continuously build team with

the as that, feel we that of about declines see secular which be of we is So, the to market, wireline that part some well. transformation offsetting good in

position a overall, that Matt, that? work. So, have and we feel good good I on a anything more

Matthew Ellis

No.

team the a great has months. we job during I Remember, over this think, look, past closed XX done the pandemic. transaction the

to ability it virtually So, on, remotely. the done we've so and and integrate all

the Tim, work a us as we so, traction customers opportunity that of And good and see an going lot you on. enterprise with good for our to broaden And there. offerings mentioned, have seeing we

everything we this done they've point. to expected do think at I So,

Operator

question comes Louthan next from of The James. Raymond Frank

Frank Louthan

we to forth if in Day? would Can Thanks. so all then, the the you you that's through us timing Verizon and like at since Media monetizing plans how balance And consider for changed delevering, any for about think should delever? And assets walk particular, Analyst the sheet?

Hans Vestberg

we we we see that call time, the we want to for generate given the years. right I going the to bit is we're what pre-C-Band have to Matt growth capital us And thirdly take for been pre-Vodafone, come to Number Our that, cash one, C-Band. to the we secondly, confident Board the incremental are position that. we clear now grow little again after is pre-COVID investing the business is our we've because get over five Matt really we're right four the as plan that. very to to or how same flow to then, about invest the Vodafone And what to going we before. clearly as CapEx last there. in and and basically spoke and going and we're said we do outlined change believe we're priorities the now, great doing a and a here, I allocation CapEx think in fashionist, Then, to put feel as we moment about dividend. down acquisition, or a have that outlined our we continue And and so for years did when this

things what or in right and are that's we neither. play have other no new updates So, no now other included

quarter our first are happy sort to generated start metrics. financial first to is we to back the the in where we there the which with So, cash, quarter doing work very pre-C-Band means good of us that for get just

Matthew Ellis

the that, no leverage Investor quarter since the is first on results. – building Hans, Day. change Good

certainly give about As the sheet had revenue obviously the for We've years, just balance of the I'll given since the on start update five balance. cash there. elevated other track we've you targets pandemic. you is the level only on think that The

since in was to that was stimulus having seen of to is we for the country happen and rates something closer the also going quarter terms do start the to past, to think pre-pandemic moving there Given opportunity the we've in us, getting progress then this what know now didn't we us And level. behind first or auction that if the cash vaccination not. the start the of of

we've into we'll all we work done. second on got here, that quarter as things And start now those get the that. So,

Operator

Synesael The question comes of from next Colby Cowen.

Colby Synesael

cash $X.X flow was seems the quarter, capital side. the in Free like on on strong Maybe some benefit just billion. a were there It follow-up that. pretty working

you the the based of leverage I'm but turns target the your implied Just terms in curious from flow for it, that about talk I'm it's free of color perspective, how in see on anywhere curious year for revenue And secondly, if year-end point. at if this you remainder any through to might including then progressing of by if give cash not being the XXXX. that for can numbers what you also sure housekeeping subscriber wireless us product give subs, fixed a are at also, if Thank of and year And be you all? shown? the you'll X.X And of just actually you. item where able then, line terms is

Matthew Ellis

part performance look couple there. at in cash in is working things of benefit flow the with we different capital in quarter. going the Obviously, directions. there of as a free Absolutely the first was happy And that,

we saw in increase device increase. related the volumes, to receivables equipment the we payables, that the saw As

but the March the payments that that would be to month on hit. customer cash we of too this good also that a As year. saw we be in that. was you – benefit helped expect, said headwind headwind year. payments stimulus bit a was a really Offsetting flow last would a inventory as saw March hope We that levels, little volumes saw year this Absolutely in those

little then, would And we payments normal have volumes had be quarters couple for tax there the receivables don't year. of cash three a come the favorable in year. a lower mentioned, more as to to return last I device year, And in quarter. we final rest year. those bit of think Those to through a a the the of last obviously, first continue the items So, we expect after cash level of flow as as I headwind the the about

So, cash still out. to going play feel good where obviously flow is about

year-end a but our nice to strong point, on update bank. target have leverage in really first at no this quarter So, the

of wireless them. the we'll terms as start fixed In subscribers, expand, those access to disclose

as up show of you're revenue up, terms in the In service that seeing broadband Fios where revenue shows does today.

up income statement. So, in that's revenue where the show will the

Colby Synesael

opposed So the… in segment it's to actually in the Fios

Matthew Ellis

no. show the No, in same. revenue. revenue Not no, Fios up service

same So, up wireless on fixed as the access also show will service revenue. then… And

Colby Synesael

the side? wireless On

Matthew Ellis

be will on revenue, service the It wireless correct.

Operator

question Kannan comes Barclays. from Your Venkateshwar last of

Kannan Venkateshwar

on more the headwind guess tailwind volumes you or over this when from away video. you the the tailwind of Fios and segment, that. that is And focus a stabilizes margins as look to there sorry, revenue is bit from broadband starts Consumer front, have year, – potentially on flatlining I the up then you a a course I'm or there pick shifts volumes mix as at margin a from due

Are to the tailwind consumer, some quarter? that for subsidy as billion guess, do expect And could So talk it the impact, that to looks guys could you Thanks. of can passed big stimulus would the useful? money to secondly, some flow then, about flow Consumer think you of puts when that well. over a that the if that how business, it of the in $X wireless you and wireless of that when the in December, margins broadband, see to second consumers about course The the was just some to be like comes you takes of starting subsidy. year I in be

Matthew Ellis

On I we've the think continue produced margins the very going business margins, across good Consumer historically I'd to and expect that there forward.

volumes increasing obviously, you significantly and we that. were you without calculation As And up nicely certainly, contributing the equipment move a also out, is Fios well as and out pointed puts the performing always denominator to year-over-year. margin increases that But as number there very there takes is in of and rightly is identified, forward, the really numerator.

a different So, takes. number and you've got of puts

the the we'll But year very the in building would that the in the to margins line You'll in have course out period. have expect ongoing well. see holiday And we the of volumes with showing up impacts that about certainly, then, network what feel the much you the the for very good seasonal over would the you rest quarter with fourth of there expect. of within Consumer, as seasonality

So, on have be. expect – be for need year, to strong the it's to give we EPS margins I to contributor and to to guidance be continue a the that certainly track Consumer to meet the they'll

I the stimulus I at show think think of good we're comment terms patterns benefit vast about working in where point. as seeing benefits, payment see up. very capital, from the any that's And I this consumers mentioned majority of we'll In

first they But compared So, with in those very that shape do in consumers and where the the are of might pandemic to good the I had given year us. it been quarter for second of the suspect going otherwise into and the stimulus of outlook to strong ahead payments something the have means our quarter, the as rest that. bills we feel very impacts good the were about

Brady Connor

see done we'll very we're today. and for you soon. for Thank participation you much Everybody, the

Operator

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

may disconnect. now You

Verizon Communications (VZ) 21 Apr 212021 Q1 Earnings call transcript