VZ - Earnings call transcript Q2 2021 | Verizon Communications Inc.

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Operator

Good morning, and welcome to the Verizon Second 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. 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 second 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

contained get on in we expected the Harbor the Reconciliations future GAAP contains directly on may certain your in are risks results available presentation with like website. attention to to draw website. measures. measures non-GAAP uncertainties. posted included to financial the Verizon's Before subject financial about measures and started, that which to most affect Slide filings our that Discussions non-GAAP I'd financial our SEC, statements This and factors materials are future contains in and on comparable Safe our this are statement events these Information forward-looking X. results of presentation of is

a as take credit, well pre-tax quarter. approximately the $X.X early of of consolidated net a as gain quarter, billion from redemption pre-tax items earnings special look a for $X.X costs. a In basis. earnings on million, the approximately of pension $X.XX quarter to of from debt loss billion remeasurement consisting $XXX we second reported a related share of include a earnings at second per GAAP let's second Now Reported pre-tax gain

of $X.XX sale. to items, May, business Upon quarter. an the certain Media for Media special Apollo sell of we held close Funds the of was assets announcement, announced effects the adjusted an second earnings second-half asset Verizon agreement in these In date classified per expected the to were XXXX. with Verizon as an the Excluding in share

quarter, amortize or the until in deal quarter. to no benefit Hans will over a longer take through per partial As quarter $X.XX result, the these this turn depreciate of closes. I'll a second second resulted of continue assets, a recap us now call we and the benefit which that, in With to the share

Hans Vestberg

Thank volumes, you second remarkable at back and our It can gradually going the for thank and you, almost norms Brady, earnings pre-pandemic and make. network and employees office call. our a quickly quarter is are our joining to in-store difference pre-pandemic resuming office. is back traffic We're year to Verizon

are work online behaviors the mass activity, distant cetera. timeline toward entertainment, learning, telemedicine, up changed The Of permanently. shift et course, speed for some from home, banking,

vectors of five have as these network an our and business. focus a And impact on of reaffirm our delivering societal growth. had shifts on they service behavioral our and the strategy on All

I've virtual enthusiastic the after very All-in-all, with Finally, importantly, who base. time spending and throughout been year partners, customers. with work optimistic in have year of our stakeholder we’ve workers, cautiously such a heroic the and done our and a field meetings, serving past customers frontline

XXXX, made of I'm of we extremely Verizon achievements the to to I first-half conclude As have aspects. have all the we in say, strengthen proud

of believe Let invested in our our our accelerate order We Media best to quarter. me the multipurpose around strengthened and with divestment couple the in We a will of model. of of which focus milestones. amplify C-Band end mention strategic as Group, a Verizon the network we the service the portion close

of a also diverse improved we and top slate brought have in our structure, X.X We leaders. organizational

maturity for our did low and outstanding borrowing treasury finance Our balance team job of cost of strengthening with an our sheet, debt. and

our We And scale and with for in growth All and goal by financial adjusted way second deliver financial a strategy to continued profitability earnings our teams EBITDA paved quarter, on all in profitable we focus long-term not this performance. with efficiency, on a produced growth. have only a strength growth. growth our to the on we the out and segments. focus operational execution X.X% in units good continued laid combined also great We also growth. demonstrated our And generated produced strongest wireless we record, service revenue and

mix both the led to XG and through upgrade Fios wireless coupled on we're to Given customers details performance our and our call. trading, biggest the a and investments strong across in strength our guide, raising in for first-half it will year our customers promotion our full Matt innovative our operations, offerings. comes the with later recent provide results, and had When match both

to On just the industry's experience. network we best network the continue side, offer customer our

consecutive the the overall XXth RootMetrics named consecutive quality. the And network awarded XXth for the number Power JD best one performance. For times, network time, us Verizon

mmWave C-Band to progress in mmWave as track areas fixed our look sites, we across back, track five X,XXX If XX% by wireless June XX the we to in reach. launch fast, increase expect And seen more of the is first we're on continue access traffic urban X% our in by uses increase to and to traffic levels. network, Our numbers activity making build, we're X,XXX and we all most deploy comes to add by We're strengthening the continue also towards vectors year-end, the pre-COVID we've of build mobility network our customer executing on we to plan dense XXX% expanding and sites year-to-date. as to we're growth. traffic these device year-end. And And near markets. penetration, to

rates majority this reflects for our devices, are now second the very XX% XG phone quarter with the experience adoption, healthy, and approximate On were value and In XG wireless C-Band of very, step-up the differentiated our a customers. capable. of them base on

very to enterprises XG Compute, accounts a capabilities on-premise Edge Generation quarter brings business to network also We will we Verizon in Mastercard with an and the record where Arcade XX solution for It's private available the XG we'll team the in available differentiation we markets. focusing And which consumer Services, that with commercially and and our important as continue The application, we unlimited Mastercard, first mix private content them through our had and in one and match high new The with upgrade transforming into promotion. a plan. XG Next we with of Play customers. premium for broadband sector large was have on-site, the U.S. on group well that Mobile together launched opted public payment XG partnerships, the business work make customer continued have ever continue develop Home markets, device platform new Google broken expanded been as add The that the experience strengthened further in trading, we nationwide, Apple new to and Expansion pass. to contactless businesses. also partnership small medium-sized across when is now to biggest content quarter, and XG a

to areas. home in home, And available it's more XX XG of expanded C-Band. the router time compatible suburban now the with which same we and states. all a parts the launched is new At urban On we

working. driving Finally, embrace our our it's cities. than business strategy to more internet customers expanded our for and new XG we and XX have recently as and ever, to relevant and also In they working, our parts society, of value is living investors ways summary, of

to that, profit five results. vector over for on I’ll to, We turn Matt, the alignment have with discuss it on growth, targets. momentum now long-term delivering great financial all With growth growth

Matthew Ellis

morning, everyone. and Hans, Thank you, good

were and Second exceptional, quarter operationally. results financially both

XG strong of We profitability and approach accelerate activity, driving We which this another churn results. same and continue deployment growth, from to to strong driving customers wireless with adoption C-Band serves of contributions performance execute revenue year. all amid our low vectors. upgrade on quarters. disciplined our five and attracted later our industry-leading earnings advance Accelerating our all contributed strategy, growth quarter delivered new off recent sequential At accounts strong the volumes building in is service to in time,

X. growth year, driven by year-over-year, XXXX. lease costs C-Band The $XXX prior nearly in our sequential subscriber million, of industry-leading despite the spectrum. X.X% with the updated first to Slide over levels, deployment go than rose Fios activity. to double by sales accelerate broadband revenue of the revenue $XX.X revenues wireless revenue agreements in quarter. second ago, up X.X% Adjusted was sequential details other through related XX.X% reported X.X% our the consolidated year-over-year. growth driven billion results year-over-year, absorbing impacted continued tower revenue upgrade more EBITDA healthy quarter wireless, up driven given second in COVID X.X%, were quarter, operating up from compared the Total media. X.X% and year quarter other to by represent service a XX% billion, grew $XX year-over-year, and was were approximately XXXX revenues second $XX.X Let's growth, and up strength and of service growth. and incremental line Fios In million our the Equipment beginning Service XX.X% rose on Total of

best As The record. EPS our we earnings year. Hans second for on execution continue adjusted record and the second-half the to the translated of are Brady momentum results, strategy into and highlighted, well-positioned the into of is the was quarter $X.XX,

and and result up benefited low from segment postpaid of impacted promotions new a throughout timed advantage increased The to quarter. our identical and record With review and recovery our in offers X.X wireless delivered activity. was favorable XXXX and let's X. almost results, Phone of the opened the of result consumer with marketplace. to non-COVID pre-pandemic the quarter phone net levels, new This million economic fully behavior quarters. churn stores in customer X.X X.XX% from second operating a consumer quarter, quarter, starting million Now, of the XXXX, throughout strongest Slide we built remained on our for in closer the ads was quarter, one levels. gross Momentum full to we account take

to were phone terrific. our device our response the significantly approximately upgrades, of majority devices, the second and XG the As net was C-Band. quarter including XX% of unlimited that XXXX vast promotion step-ups both upgrade higher our differentiated premium for exited ads a compared a ever drove using The with trading, our customer result We working. was quarter XXXX, indicator is to proposition, adoption phone supporting and strong consumer. plans, and the XXX,XXX second strategy to biggest second broken quarter which of XG capable Device with base best

was offerings Fios the a for the year mix of retention, service, continues net internet on ago. more reliability nearly opted a for our record account premium on premium In historically new unlimited The base nearly plans, unlimited and of and were our account of in our than Fios with accounts XX% base match strong XX% demand supported base customer of XX,XXX totaled quarter, than approximately plans. simplicity plan, unlimited of drive high, quarter-end, strong by high. ads with At is customer addition, to and our Fios internet higher our quality XX% step-up and combined X% a rates broadband.

XX-month trailing Fios Our performance since XXXX. the ad net highest total internet is

mix of in the should driven international Fios speeds. highest to results Momentum expect the by we gigabit uptake over billion, customer X greater X.X% XX.X% a within year, resulting and the The year-over-year from revenue move and XX.X%, proposition. financial the provide by continued Equipment compared discuss let's down value uptick activity to match We comes consumer driven EBITDA surpassing top-line impressive revenue $X.X further from and Consumer higher to quarter plans products quarter minimal reseller Wireless broadband. remain a X.X% pre-COVID Now, the to XXXX, translated revenue revenues higher and from driven year-over-year, Slide was higher was trends. margin our levels, the adoption continued also by customer quarters. rebounding representing EBITDA well grew the results This segment despite activations. prepaid. aided contribution of and prior levels Service to margin performance. improvement The such grew for ever. improved pre-COVID from second revenue which our X.X% service versus encouraged as driver, contributions growth above quarter for XXXX. is an to of in growth, growth represent by biggest Fios, Total translated customer revenue quarter step-ups, growth activations, as XXXX. content, as from continues X.X% with of momentum roaming, primarily by future growth, the second

COVID-related X.XX%, basis of from XXXX. X.X Now, million, X. Business let's particularly business up within on up churn was year-over-year, second X.X% over sector. X.X% move wireless highlighted XXXX, to elevated the phone by over points was Segment XXXX, and education activity our disconnects the postpaid quarter ads of the second segment up quarter reflecting Slide XX purchases in vertical public postpaid gross

was Despite ads As offset the both in in both fall, improving strong for schools in-person posted net at plan quarter. of public trends strongest disconnects to more in their disconnects a we in and disconnect over which this remain phone phone learning XX,XXX, sector. net expect adds in third pressures, public in the the elevated SMB enterprise, sector with year,

the XX, the review XX% business Slide first with was growth driven wireline revenue to year-over-year, revenue since and mostly onset COVID-related pandemic. declines to move EBITDA wireless Public pressure. returned churn growth in a up primary margin approximately business which The by the up more of now was quarter, XX.X% quarter to show increase. over total approximately in Equipment strong delivered equipment points strength XXX of year-over-year. driver education. down higher Let's is X.X% growth business Business is the The normal Sector partially demand. wireline, financial by of top-line X.X% trajectory performance. volumes service basis was revenue, XXXX, segment offset to continue and the driven momentum the the in after by Wireless growth strong strong and elevated in medium segment enterprise business, COVID-related small of was pressured which though by

While opportunities drive to pressures transformation margin. the economic initiatives business reopening, in the likely enterprise and for near-term, XG provide persist

driven XXXX. second let's up Verizon Total our quarter and continued Group to for approximately performance, and XX year advertising Media move Media Verizon platforms. by for revenue Now, from XX% its and demand delivered was recent XX% with Group. to our a billion, engagement Slide $X.X trends brands high from discuss the ago, quarter up customer on strong

billion, from as on capital greater was impact operating from These were to Let's second range of more volumes. billion the $X billion Capital year. the in totaled network, wideband is by cash continue of cash change taxes now period. year. compared the in the our for was the ultra Slide confidence quarter will of the growth $XXX flow results. of as first-half, C-Band to of to Cash well of of cash and $XX.X that we and The our first-half LTE requirements orders capital operations million The flow XG payments working billion on be net approximately tax the $X.X equipment of spending the driven COVID-related billion. the capacity our for of giving have ago year-to-date, a reach $XX.X XXXX, The a results expected was billion, related us support activities flow the XXXX first-half move while as our we we from of result postponements within XG than XX. free traffic received totaled expanding XXXX due with to for prior a and previously higher and $X.X placed higher network. the for provided billion result operational benefit $X offset $XX.X for in by year cash first-half year strong spending cash headwinds flow primarily one-time CapEx

levels of of and we balance to the the the $X.X with our given billion period we as $XXX.X $X.X sequential normalize of cash closer footprint. macro billion, billion. with unsecured sheet, the optimizing $X the on continue on to improvement cash a ended of pre-pandemic we the a We debt quarter, focus began change balance During our to quarter sequential billion, exited environment, debt

at billion flat X.X the this in borrowing second $XX was the to $X.X approximately ratio XXXX costs net levels, times. debt adjusted total additional billion, billion, first-half our end debt quarter was which relatively despite having the unsecured in quarter year. second EBITDA unsecured $XXX.X was to of approximately and Net Our were debt

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

include service guidance raise third business reflects the sale outlook that Media as prior seeing timing products of performance anticipated the quarter. positive are are Starting to fourth based note, confidence Verizon growth. content, to from X%, first-half as Please premium revenue, broad planning adoption, reseller raising the momentum the and business sale would revenue plus. growth up prepaid for revised the the the in well any and are of the such from not that assumption that wireless we us plan recognize X.X% we closes as to strong cloud and guidance. end our means gives the customer X% at services Verizon updated outlook the The The of we Our with the and acquisition, quarter. revenue drivers trends Media our in and

time. As a withdrawing and an service and no with result, other apples-to-apples longer guidance at revenue is this XXXX, are comparison growth that we

to DNA the is EPS reduction of the the earnings, improved $X.XX. The up adjusted we media an $X.XX the aforementioned related from to prior investment. service outlook, Turning interest expected expense a the range by C-Band benefit, increase now range expect $X revenue driven in wireless to of $X.XX, and to

Our capitalize rate grow CapEx volumes, and driving XG summary, our growing we tax effective effectively healthy accounts, adoption. long-term, step-ups were guidance for unchanged. and and strong competing the positioning delivering we're In to as base

we to financial line into by growth, on We performance customer wireless EPS. of quality I also demonstrated with the momentum, best Our our results, With while and the now lot second-half bottom sequential of confident turn continue strong will revenue with for discuss our service Hans the has I the to am priorities and operational the flow a results, to remainder entered financial record call adjusted as led year. execute throughout of will to the the over back remainder and that, strategy deliver XXXX.

Hans Vestberg

the beyond. Day, second-half commitments last We innovation, generate XX-months creating the we network strong growth you, At investment out as and a in and for Investor for growth. service over acquisitions, plus Thank of our through GDP customer a beyond strategy scale and and XXXX Matt. platform and laid our divestiture to XXXX transformative made

and our XG further amplify network C-Band on to mmWave industry-leading second-half, initiatives customer and Our and the leadership adoption, to priorities our cement build through further for current network continue assets. accelerate

the to we and our to value across expect later and on great for this I’ll VMG the We Q&A. well to the customer in transformation we're segment. what increasing and the with that, our year, in customer Brady innovation best-in-class the disciplined on execution. end, confident do opportunities competed it drive over turn With best, focus close transaction marketplace, experience we TracFone very growth overall, excited At bringing our and five our ahead. focused vectors first-half, the very And and and

Brady Connor

Brad, take you, now we're Hans. Thank questions. to ready

Operator

you. Thank

session. question-and-answer the begin now will We

Goldman first Your of Brett comes ahead. Feldman question from go Sir, Sachs. please

Brett Feldman

taking don't two and Yeah, mind. thanks the if for you question,

run year insight. it, maybe then, of want Thank DNA being of you imply it's go to the operational. relates number away but the you that, year? the outlook then was last that of of from I'm you've know all that on just plan of return at it would seen Matt just for from I just embedded recent that behind to I we high-end, was if some just the appreciate you're in that media the $X.XX that can I in more. back accounting you $X.XX, you. of revenue more something to And already? a out you come $X.XX, were EPS benefit this But the is a think that things got a shift wireless outlined sort service to nuanced outlook outlook? than moving if bit into that as the the outperform from maybe seeing improvements of the rest with hoping captures At the that rate this in dig look Or, actually doing quarter, First, interested your guidance, Is that any had color the we improved the improvement. a it on that's I mix? fees pretty significant improved what just giving year. growth are particularly And

Hans Vestberg

limited in. there can think the doing the down taking was offerings, see accounts in have last But service new taking XG they're done that our penetration quarters revenue, premium. way and The is right I happening. XX% said, And quarter will start has been that Matt think our job fantastic I are now all on step-ups, a the the as customers the Matt limited I to to the of team fill premium. seen a differentiate four you've how

we just talk match. these we consumer the growing the if So years, do more for that. we continue have about -- side, on where several added than we've the and They team mix we’re

the back, a of they clearly see, market. and at getting time, the we back have and same We differentiation it the calling is call And pre-pandemic. to them in almost course, stores resonating are

for that feel I on we going timing the long focused So, growth. profitable that's all of the profitable also momentum for that's in If what back would we're say has the all, the team successful. a growth. The our how team see this And service very Matt? to market. But, about is with advantage is all, that. what good why guidance. to now, and having revenue is remember, be That's translates right it's a all been but in guidance, couple taking support team us and it, of years in growing. we're always the as opportunities, also to a and good and I been it's our as And all strategy, is doing. we've Matt we do And seeing the

Matthew Ellis

and question, Hans, Thanks, for Brett. the Yeah. thanks

continuation even as mentioned, the momentum that further, on the of Hans question the So, service sequential The really revenue growth, saw that quarter. in quarters, couple and we about in first-half increase the saw revenue that building growth, starting year. it's the wireless with prior the we second service the seen of of we've

more expect get the continue the mentioned, into to momentum year, cetera, Hans price of et plans, because higher et operational as that the step-ups cetera. We trend to of we that second-half

you time, as COVID. to this impacted by heavily year quarter for obviously, the of was all the place terms pledge rather of component that In second Americans the second fees. course, impacted we keep of more connected And for was said, year-over-year the is of had specifically, that some as fees, most the last quarter unique in us,

the balance chunk of We're numbers A in. those fees year, the ‘XX. level. you been that think items, of the aren't is at One good to numbers, in a first-half a travel of of you to those more has system, are yet, customer frequently. payment thing payments of numbers as paying about international to return the there, year draw very our the second-half As other not about patterns, couple certainly, I’d though I thing is money which out obviously, the actually one you BAU at there, about in back back And this guide any to is an well, fees, year, next think a in to the of levels. in pre-pandemic as a get strong are return doesn't make see. we and be year. there'll of the when be the this Hope attention and close anywhere but of for a don't things all tailwind that look there's stimulus lot acceleration more expect the great over into with customers assumption of

fees, at were normal late trend we quarter in actually things we're of is very customers to of which more paying our we're second like we're back of point, time though, happy less to on see. that charging terms in this even So, because significantly are than certainly a ’XX,

that in higher for the not of up customers think the stepping plans, in based are is and some back back they operational business, back. them year. momentum the will all see we And about be price guide momentum fees of it. continuing. are the not off those we're when of the to balance of The But assuming strong So, you

obviously, Your be to very about business guidance glad second off that's is based exceptionally EPS question raise the well. able healthy the a and that having guidance, to performing

$X.XX, start mentioned, from expectation cash amortization, of the the you the the to media on items, about service from its depreciation, expense, wireless But timing of related whether the coming of we just than probably $X.XX that close. revenue but the to the cash around improved of upside the were comes also majority lower some guidance to anticipated As interest be year. depending discussing, the guide, at

financially. by guide items, you the off driven cash-related is of most the operationally So, both and the that's strong of based see business, and course, in momentum

Brett Feldman

Thanks that for color.

Brady Connor

Great. Brad, Brett. the Yeah. next we're ready for Thanks, question.

Operator

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

John Hodulik

morning, Great. guys. Thanks. Good

the margins? it's comment trend But to year? Do year-over-year, maybe the levels. would on obviously, I price question the pressure that to upgrade if imagine helps plans. expect continue Just into even and those you move margins. the but into move people not it that, as the ‘XX you we even rate, then, up incentivize revenues second-half And of on over on just accelerate mix impact premium may higher could on higher put the equipment of

sort just margin these second-half built of trends how great? the the foresee you as So, in volumes be would Thanks.

Hans Vestberg

Yeah.

both is time, performing for Apple second in then As unlimited, And this we both we said what with At and network value gaming. a had and is around that in traction unique quarter, before, excitement with and course, mix right our of we have model we our same we've now also this XG, added now us. And proposition Google gaming the well. we have good launched have extremely the match, formula I that since we with that have done. you saw

think this. I good very they So, have a model our team, for continuing very, that

more I become it And yes, gaming. quarter, I said think, and of it value first this we in differentiation. will it went the proposition came, into

doubt. to is this. we it in the without grow team using to you them, that that vectors. up this whole network quarter the a say of come with that we’re vectors why And things I see five a our and we all continue five are our executing playing the loves, of confidence brand these our and to part team customer again, to Remember, long-term a have of and distribution, strategy. that's of all growth, guidance And all on are that in So, lot of also confident already continue Ronan's I in in our

Matthew Ellis

Hey, John.

of as which So, revenues the margin you at and are sequentially, you But, significantly equipment look up higher obviously, dollars, also shows margin year-over-year. the mix percentage. up up the think in to mentioned, have I also

performance very with the So, that line. happy at margin

a but of have on volumes equipment we second we an had like and revenue, when quarter. that you higher As it the margin, say, margin impact I combination in the the has

As with second-half year coming place -- we outline new of head of we the and in office have into to market. the our devices the the the mentioned, Hans combined with that

would XG we equipment go economy, we would the the the As of to to EBITDA underlying that closer second-half to dollars also will of good in expect in the expect strength And the I volumes in that. see see get I year good year. second-half the along launch, with

John Hodulik

guys. Thanks, Okay.

Brady Connor

the we’re question. ready Thanks, for next Brad, Yeah. John.

Operator

question comes Phil from The JPMorgan. Cusick next of

line open. is Your

Phil Cusick

AT&T, thanks. Hey, broadband Two have broadband that? you NBN strong. if a lot online potential with going Thanks. channels? all couldn't XG, look I days consumer you customers do many that you home in Did second, wireless How at guys, after Boost And away think year. XG these home deal? Did about do can, for competition they how And the cable now? these last happening after drive new were from

Hans Vestberg

a comes it open provider, that. XG we mix to our in that. And that we and brought be vision access use want we're When Thanks. broadband technology as to outlined, on was to to general, fiber of to customers nationwide for our broadband up in have even going is this best and we'll XG up a more everything C-Band, mmWave, suited opportunities quarter, all to of for from that

than course, XG Fios’ four open more will XG more well, in more three, We we outlined home Matt ever we quarters. markets. And will as open subscribers the then home as last took of markets,

playing up for that. of us. We're opening all well So out this is

the about as second-half a excited going what's very well. are new happen with has CP We that in C-Band to

year, of in we're do second-half we forward will we and continue second everything in Day, this we what And should So, we out report executed to said quarter. the doing. the we Investor the look the

I question, or that but we we're market our we open customers on on comment business, But for deals second any the we The in particular happy have MNO. with like think don't a that. are something

Brady Connor

the Great. next we're Thanks, Phil. question. ready Brad, for

Operator

is Stanley. The next of Simon question Morgan from Flannery

open, Your sir. line is

Simon Flannery

much. so Thanks

any said more previously you X,XXX the later one the the the quick on this TracFone, I to are equipment to those expectations of Any on year. then, And you you process, in color to X,XXX think you. the great. C-Band, that? a longer-term of and terms any or rolling in getting Thank more to ability guide, beyond wanted how you the about And XXX of million out? Just closing the on thinking towers updates deploy C-Band, reiterated targets targets but I see color chain second-half you timing would on the be supply on said, year. your CapEx hit

Hans Vestberg

is TracFone, on a responding has It’s to need or all according So, think acquisition. to tracking outlined through. the we we The plan the we we that proposed process go to I have. team changed since questions nothing with

on So to the the be it's in time. as of second-half part going thought latter the we the all XXXX,

are. strange, nothing that's we it's But So, where track. on actually

Second question was…

Matthew Ellis

C-Band.

Hans Vestberg

quarter, can X,XXX yeah, we're first to reported we we X,XXX just had started the track. we sites, When everything. The yeah. C-Band, definitely say on

Now we feel supply chain. we funnel with supply great have our a done in full chain job the guys our partners. The a in

very well. X,XXX, our have and We team deploy all X,XXX executing need to gears the to we the

the up have So, we continue sites have X,XXX as we year-end. it good feel I ambitions haven't and execute. we able before, about to long-term, very same for to comes when we And X,XXX changed the mean, those, by being to

will on or of the the right of on we're different we executing can, types the as far, on ahead the for plan, involved we now given But, plan do in fast milestones so end we year. spectrum. are So, of as that the are that it and executing

Matthew Ellis

on sites for to radios one our vast you, warehouses. turn already majority Simon, in that those of to X,XXX other point data the need the X,XXX we seeing

our very Their do, it. chain in came March, were still out after but So, where supply we the we auction And, from they partners. working to the are the of place lot of teams work network with well strongly we today. in detailed obviously to a executing against is where are robust, and plans

Simon Flannery

spectrum working And the okay? clearing is

Matthew Ellis

doing clearing also stay close We hear track. everything. them the completely Spectrum on track from that's to well. We is folks on is as

Simon Flannery

a Sounds good. lot. Thanks

Brady Connor

Brad, for Yeah, next question. we’re Simon. thanks, ready the

Operator

David Bank from Sir, of America. comes question Barden next open. your is of The line

David Barden

more outlook current the question thanks an coming the something pretty for for would the pipe? Does related going with past about take from in in We've opportunistically the new to you, CBM significantly out. second much. is that? obviously service seen year In either consumer second-half handset XG guys, Thank have some upgrade the business. talked else Is for And stuff gains of that the the or second-half be you. come the range. Ronan of that the down some the promotions has Hey, you cost see first if Hans, of what's so how the to kind relative new Margins last to then promotions prepositioning? on? drifted you down is permission guys further, And consumer the couple improvement quarters there up XX% been the year. of to down have Or, quarter, Verizon

Hans Vestberg

and it. the see our with love you what the see what's Ronan, continue wants some something we're here. these as long want to we through a But to we think quarter, we Matt they the the on a think we second-half. course, the stores, and about it’s -- as saw and And good to back if do. did want have growth they When little I do sign been think results. That's why opportunity, But explained growth have he is we offerings part to into as on it would back high-quantity. which that. back, market solution say where has the see it’s And we really bit in and happening I I what in can you in David, of going will and hardware for come margin of high-quality in second strategy customers is And they profitable when will the the our a to group, and we it And and lower, if that's clearly, I an constantly came support has and you, in market timing. And in coming been that market. tell our is there. Ronan coming because that about them there's the quarter. focused we was this we see call consumer resonating comes are And traffic he are business included think good good see writing we team, profitable differentiation to

Matthew Ellis

service that the Yeah, continue in if EBITDA dollars volumes. percent what come We the in because ads And that, quarter. so margin look growth second created saw not in are increasing. obviously, you said, But also Han to sequential just be the equal. revenue by we're with in adding so also as industry all good to the focused volumes Hans, will lead net impacted on their is

also revenue percentage direction. margin does where the seen volumes. sequential the right it the and on So But focused play will have the flowing out that we're EBITDA dollars in increase, based off you

cost second In step-up predominantly items consumer, I of and terms the a of of of quarter place. result as in we in million the around think that new the quarter, service, $XX lease network of in we lease in your one was question a a put rents but had about payments the the

kind payments how life the and of payments over the under irrespective you accounting, flows. flat you lease know, the cash the of flow at total the line of As actual look

quarterly $XX about a that’s impact close through that was in obviously was And be significant million, say share step-up should now. a rate the there that flow upgrade a same that, that one-time agreements. a books the forward lease the penny to let’s there So, from to our going

you're cost of biggest driver So seeing the the on that's service.

David Barden

maybe that. follow-up on just Matt, So

Brady Connor

Thanks, Dave.

Okay. Go ahead, Dave.

David Barden

Thanks.

all in So just, consumer? that's

Matthew Ellis

costs business, wireless of Obviously, in majority of of vast some the that consumer. the majority the in to in allocated is of wireless customers, consumer. the is the the but majority is network are revenue The service majority consumers,

to costs be basis that. largely in on the allocated so line And going similar are to a

consumer. is of most it in yes, So

David Barden

negative expense. of the EPS for And three, guidance impact probably then worth four that tower increased two, your noting $X.XX Q includes that then

Matthew Ellis

the that's fully baked in cost. that and guidance Absolutely, into step-up

strength in comes the that baked that business back So, that we to of with have underlying well. that, even the as

David Barden

Thanks.

Brady Connor

Brad, Great. ready we’re question. the for Thanks, Dave. next

Operator

The Rollins Citi. next of question comes Michael from

Your line open. is

Michael Rollins

And channel? the you you've portion whether a good wireless Thanks, want been providers? for destined of to And, versus follow-up, transact the to wireless, online a now for simply upgrading morning. to and number virtual home. XG service and reopening, what wideband learned it's during or are transactions Curious in just changing about focused mentioned phones, where a pandemic physical then remain with ultra large customers markets of that you locations, on and

end wideband and and Thanks. you ’XX. if population ultra share the for of some Just could of home and for curious numbers household the end for coverage ’XX, target

Hans Vestberg

our and as of were the digital high in it we seamless customers. on our start do course, in and had they No, to we comes in But, behavior into end building customer order the you. and more our United changes they saw But back that store when we But levels, all States the coming economy the before. phone, that up web, stores. already that to will the or coming clearly, can we can start vaccinations on some possible. back omni-channel in see started the traffic see also also, can as the they Thank these than much came on and when of store, see the in

we’ve we quarters. would close. clearly, than previous opened second seen pre-pandemic really in the fairly see in the quarter, days, back to say foot I So and stores but had, more traffic our we have all much Not

technology customers a our format. delivery want come think they purchase to still products, build we that's going how a our the store So, the be to finish and in store. wanting but our and and our into And might we see digital to

area. great I in that our So doing we're dealing feel new really can to working about that closely good that that’s us, and meet with see customers think are very behaviors our job a team the that we where

Matthew Ellis

the mmWave in Mike, coverage. about your don't we around the of mmWave really coverage, talk terms question

the end usage That's In urban in the XX,XXX can out for customer of combination building We heard well back Hans you running on more year. the terms to XX,XXX the levels, hands, and pre-pandemic customers pops, by sites through we activity year. to the mmWave sites more seeing of devices mentioned on XG their are X% the obviously, first-half sites. schedule having dense mmWave more ahead to upfront I of year, of XX,XXX XX% this that by then, of year. tell we're the we a would you, track end do over said moving our of of

said as all of million to sale continue we track of we to by expect And coverage. then X with on to the we'd we homes And open so end with the million cover that, mmWave for And we're do add year. items. those X

Michael Rollins

Thanks. look XXXX? Any to early

Matthew Ellis

we'd we the The said during team obviously, whether on on is the year. network to we're first C-Band. build at for everything but And quarter doing XXXX, not remember, give next million be going XXX continues whether pops – guidance around mmWave,

that We be at expect still track on level. to

the out important expansion as So more network I best can't time, is doing the whether the about have the there at well. XG speak work fiber build, to continuing and network it's network, the expansion, highly C-Band to point mmWave they that team in this obviously as the is the

they're and plans activity, a and doing be both tremendous our XXXX So, longer-term they man continue to plans, too. on our

Michael Rollins

Thanks.

Brady Connor

we're the next for question. Brad, ready Mike. Great. Thanks,

Operator

MoffettNathanson. of The next from question Moffett comes Craig

line Your is sir. open,

Craig Moffett

Two quick thank Yes. Hi, you. questions.

Fios of if part you business from What am comment your on I about with you And, saw wholesale didn't with negotiation? the impacts observations whether deal just Dish to talk whether any you then significant during all, or return business? to the asked, program going you of were that in are? I your that Can wireline the First either discussion. question could hear EBBP the separately, a wireless And Phil quarter, AT&T? your

Hans Vestberg

don't won I specific cannot for Hey, as not. comment in comes that I we're business. in when T-Mobile, to on itself is the deals our involvement we on this market, AT&T apparently, from it And something But so comment open said, or that.

of is model, part we of is and vectors what of growth, very natural have. MNOs the five us happy which for monetization and with a that well strategy have we're off We paying

Matthew Ellis

say quarter. was Craig, certainly a of second some our our our during but customer second wouldn't impact we significant to saw certainly it did the your in see that participating. numbers, of the we I participate in question, customers course base

Craig Moffett

you. Thank

Brady Connor

Great. we’re Brad, Thanks, the for Greg. question. next ready

Operator

is is line Suisse. from Credit Mitchelson Doug of open. question next your Sir, The

Doug Mitchelson

EIPs this is Oh, me great. moved mean, handset, well. lower as even XX-month to I than AT&T questions for and quarter, Thank churn XX Two periods theirs. first, you. your and

longer thought and XX-months? put how up really and And, out on curious model about Your XX-months XXXX And C-Band, customers I'm we why you just on and average. Have customers. not, around of going stick for sort you to cleared, period? the figure right to even you longer if switch that try get is the than licenses as light

going you of I'm starts if in what terms go go-to-market that thinking into of sort change, see big if happens your was investment, And through how's a on Obviously, strategy to just basis, As XXXX, at all? do that's sort kick their consumers experience it and in? materially of what be to different? a practical

Hans Vestberg

Yeah, the start C-Band. with I can

an For moment. important obvious it's reason, we think

We our are both the opportunity. amplifying and accelerating XG the in amplifying network,

of going right We wouldn't we be ideas over think it's to launch we are But, we're do However, going excited it. our given this commercial to away our that. when now for great XG wireless mobility options, Compute expands extends our fixed Edge it access going and Mobile also fantastic our be performance options. it our XG customer, XG and options, to it’s course,

strategy. into straight playing just our it's So,

are so over they anybody today, our equally but we is that will So we are are else. how so getting excited it. as they we customers, will come delighted back it’s network much that bring than superior to our And something with

Matthew Ellis

marketplace. have we on Doug, It's of first about with handsets your period, in we're lot very the Yeah. question offers comfortable a for XX-months Hey, items. device the payment the

effectively. consumer priced But, customers doing very little higher we're phone strong. that. is five, as shows with longer working Dot just and churn items, it's manage what to for of mentioned, very, a you bit Some is six, feel the it. the very, treatment see we off what will to adjust it, impact of and do the need be very based with on accounting so, we on not be customers focused we it If will the any but need associated

both is our what the standpoint a continue too. And, from and an doing resonating So, ad see churn think from I we with results you second quarter, focused on customers, be customers. to for in the we're also finding the standpoint offers will right

Doug Mitchelson

you. Great. Thank

Brady Connor

we're Brad, Doug. Thanks, Yeah. question. ready for the next

Operator

from of next comes Peter Supino The Bernstein. question

open, line sir. is Your

Peter Supino

Hi, questions. A of related thank you. couple

of one repeatedly that the is competitors talked about come from improvements your The network XG. capacity first has

adjust M&A, their that you times infer for you that XG seven is If up company's about capacity their for could target expansion.

wondering on of curious growth and so, And for investment note, could capacity spectrum? allocating suggest the Verizon’s wonderful to then, the related you I'm think could And number the C-Band? how considering I'm relates describe if a in the about business, you if a similar as potential, cost home you

Hans Vestberg

Okay.

XG than of a well. first is the really one, what as listening is better if And data it first XG. XG around handle to that's before, better technology been talked obvious, to I've On XG you've all, as than about

Then about need you that's only you add So -- spectrum, how that not you network. you're about talking how and build talking happening. to the you're to engineer

course, not of being we remember, we we to more handle use mmWave, And great on today megahertz might opportunities but case, our more, in able data. for see the much and XXX, megahertz, sometimes So XXX have XXXX nationwide.

more And than bigger showed now. our much as the right before so Kyle we there's start building building headroom before. do. And Investor that's So, we the is Day, we're in can what at network

is So we're what many our we And are best we the right XG And XG doing also feel extraordinary really now remember, then that adding nation. ex doing. in up already are we is confident good. in the how

with execute, and will and talk can that. others usually we we So continue

Matthew Ellis

fixed wireless. that to a we've all provide on coming same everything think network that and of gives the compute, be standpoint where XG, the off we we've has reframed obviously technology, spectrum. investment, view had the the network same of this costs Peter, streams of whether the ability have XG, that about start the drive wireless investment mobility, made C-Band the allocating is first foundation that been wireless to build, opportunity good also access, part edge both build, of and same the the the of actually revenue off mmWave. second we I've your from time return to in very since network the the can multiple that then also which on and So have public mobile that us question it of But of

Peter Supino

very Thank much. you

Brady Connor

Hey, next ready Peter. question. we're for Brad, Thanks, Great. the

Operator

Venkateshwar The from next from question Barclays. Kannan comes

is open, sir. line Your

Kannan Venkateshwar

could. couple A Thank if I you.

some whole. non-paid that the But, a for front, benefit at on Firstly, the I probably as churn that programs. subsidy guys think you noted obviously will reverse of of because the the industry point some

how sense for increase versus sense that now And some help service? get much Thanks. to base? much that [indiscernible] be number, normalized of least do, is in then I impact how us deal what how normalize? is big us year, a You for tailwind you sense of this but impacts to typically accounted give kind you what did Could would good doing the of cost Arcade. how service Apple cost And the quantify some to of for on your with a cost So this trends? now, it overall an you of could And that churn? understand is things mean, new also of right you get have content might when the secondly, a a non-paid in have bundles is of lot

Hans Vestberg

talk now. will a times churn. to When Matt no-paid and it couple can, content I deal, I said of it about comes think the I've

Our for customers. only incremental that really as profit we’ve offer exclusive the wireless us. offering that whole to us. us. brands to loyalty, idea we for also that not before want our think revenue resonate with for It's model, is And spoken offers partnership to is we is And actually this incremental it's about

a before, Disney on brand cetera, customers that totally experience, it's assets we these already and with model companies best a best created it we're our with best paying mix because have with distribution a Disney match. we suddenly, sometimes work the to to we cetera. the when asset Plus, customers our and been customers, have of or network, might ultimately, because et with in et the we So the not that, to fair the use like Discovery different share make premium market of give gaming together differentiation the And for get our Plus, top

the we're said it. So with is pleased I very that's how as before, model And working.

now and very to if I our market And think them seven continue or see find offerings customers. of all right we positive of can will more. and six in to us to we are the these we've

and that not again, else differentiation I to have bring customer, innovative but the offering. market. said, goes model only And nobody very network, we it team in the being created best back to a best the see that and think the in also the our Ronan unique has it’s creative to as that very, I we

have more in to And I So with that. as I said, pleased funnel. say I'm very we've the

Matthew Ellis

flow of small at side. and from bringing items churn. around the Kannan, the say points in benefit business, your obviously, I it's associated the you're better the benefits should churn of on the seeing in of continue is profitability do question the on strength And a bigger EBITDA you the we see churn engagement the the total of involuntary there. with And number that customer, brings Hans that that a the customer We of proposition, that line. very sales, be when that Hans has see the as a win-win. on impact customer churn, reduction the together, number overall also coming look contributor the a overall the to number to what customers. just to through would other basis it's call number But experience of in to overall to what And of we a touched actually network, that experiences that cost with especially other bring the reported, experience we we also piece the being additive in mentioned, the of cost on, relationship phone the the terms consumer of the content that expect

Kannan Venkateshwar

Thank you, both.

Brady Connor

more Great. for Thanks, one Kannan. Brad, question. we've got time

question, last one to please. go Let's

Operator

is question last of Cowen. Colby your Synesael Certainly, from

open. Your line is

Colby Synesael

you. may. Thank I if Two Great.

T-Mobile to did then saw XXXX? business a assume that margins, to below second the some And something across some way biggest of since least long in and continue for to investors to just something space in at although the there so as you're even also you'd below the Or, ever XX%. competitive promotion, that an that quickly, obviously market? to the curious And has quarter, competing your should form implying or like the is north expiration you. look in other be this similar you it yesterday. really be targeting you changed is the on one-time that you're guiding a the there's Do competitively, target, just off doing guided this upgrade look I'm it at that at And quarter, for also, AT&T looks impact. First EBITDA we XX%. at of something with been just the in below really March, us pull relates and in period, what's is like back promotion sounds fourth that Day we that back if when it first today's Analyst sustaining not really market as new from going permanently? for point Thank quarter,

Hans Vestberg

come I answer the can on make a Matt quick and promotion, will back.

did We have already That pulled the biggest we XG upgrades on today. the market.

Matthew Ellis

day. is Today Today. the wireless

Hans Vestberg

Today.

bit right it's out comment more the it. So probably will in a is yes, on moment. But, coming and Matt it we see little when

UX before. in this that lot side. headwinds, between more to we've same going in sort not scale and doing the side, we're through are platforms opportunities invest They're the be one to a time halfway time, take decline. they was side, there all wireless to business. -- business, to the able of And for the it in and we'll good business customers of great moment, than about and be we that share. talked during harmonized cyclical, never to and as the have. is they no, are have we the I that we that seen CX our On of Remember, business the in cyclical wireline and QX, where different to and we businesses doing products, we Tom transformation or consolidated business, we have some order be have the had Matt That team a it's be in or said are that order fair remember, with XXXX, compartmentalize our probably it's would see sustained think a of have it. business then, we over this our At the a

into leading that is of balance, We are in quarter. all course, segments. coming this And

we're fixed for. proud Mobile as we're how Compute, of team have new and the using what's XG as they we to, And well. be so realistic, wireless same market we but private progress internet, quarter have Mobile when we're the of this a And hardware the comes transforming access, have we're out the more had we then, yet, on that is to seen internet, lot and business coming ambitions, with for products networks, which seeing building building we coming the new course, aspiring together with Of Compute, building. in but that's what happening the P&L transformation we're what and business I'm then team opportunities Edge the opportunities XG not are financials, And of we into the the will or doing. new it XG it -- Edge course,

Matthew Ellis

a on margin there, other business couple just so Colby. the comments Yeah,

than higher volumes So, not that saw mentioned we also the as Hans the were than wireless higher volume the gross last higher ‘XX. XQ, we year, XQ just upfront it ads that mentioned

more to in obviously, come pressure, there. And volumes expect then the So business, medium margins some and small, wireline especially impact having the with year. second-half work doing, that's saw is I enterprise certainly be reasonably as to so is in first-half having similar The come of seeing to business back, the forward positive team we go here. would what the transformation we impacts

has an So, start there, secular as both it's date. about and a on we question and it wireline direction a means we see. terms these that spite That headed then the today promotions, date end date, end Hans said, the of in feel in your is teams of promotion. And good pressures the

this so. and the right in over and the great of run more operational a device they C-Band the with economic launch gives us It within of the the months. promotions the since do we're with wireless there. strong financial hand, about this to when the marketplace results. the And in we've in the because their the was results is as So the XG at promotion get to reopening beginning continue industry. wanting time They've time's will right to felt we're evolved promotion time, right next position We bring six out to customers ability

will underlying approach the the yet to look service we we us the sequential the for operational right is time. right have But, as at up to in continue position flexibility promotion we performance what revenue business of again, the So, increase showing how wireless the think about market. gives

Colby Synesael

you. Thank

Brady Connor

safe. the Thanks, questions. Colby. time be have Thanks, all we everybody, Great. and today That's for

Operator

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

disconnect. now may You

Verizon Communications (VZ) 21 Jul 212021 Q2 Earnings call transcript