Verizon Communications has reported its financial results for the third quarter of 2024, showcasing notable growth in key segments like wireless services and broadband despite challenges posed by severance-related costs and a slightly diminished bottom line. The telecommunications giant continues to drive its strategy focused on profitable growth while navigating market dynamics.
Wireless Growth: Doubling Postpaid Phone Net Additions
One of the highlights of Verizon’s 3Q 2024 results is the impressive growth in its wireless business. The company reported a more than doubling of its postpaid phone net additions compared to the same period in 2023. Specifically, retail postpaid phone net additions reached 239,000, a significant improvement from the previous year. Total retail postpaid net additions came in at 349,000, demonstrating continued momentum in Verizon’s wireless operations.
This strong performance reflects the company’s strategic pricing actions and a surge in fixed wireless connections, which are critical drivers of wireless revenue growth.
Broadband Expansion: Surpassing Subscriber Targets
Verizon has also made significant strides in its broadband division, mainly its fixed wireless services. The company reached its fixed wireless subscriber target 15 months ahead of schedule, showcasing the increasing demand for this product.
In terms of numbers, total broadband net additions for the quarter were 389,000, marking the ninth consecutive quarter with over 375,000 additions. Out of these, fixed wireless net additions alone accounted for 363,000, highlighting the growing appeal of Verizon’s fixed wireless offerings. By the end of 3Q 2024, Verizon had nearly 4.2 million fixed wireless subscribers, an impressive milestone that emphasizes the company’s leadership in the broadband space.
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Fixed wireless revenue for the quarter was reported at $562 million, reflecting a 38% year-over-year growth, further solidifying its status as a key growth area.
Financial Performance: A Mixed Picture
While Verizon’s overall financial performance was strong in certain areas, the company faced challenges in others. Total operating revenue for the third quarter stood at $33.3 billion, essentially flat compared to the third quarter of 2023. However, despite the stagnation in overall revenue, Verizon reported an increase in total wireless service revenue to $19.8 billion, a 2.7% rise year-over-year.
The company’s consolidated net income for 3Q 2024 was $3.4 billion, down from $4.9 billion in the same period last year. This decline was primarily driven by severance charges amounting to $1.7 billion, related to the company’s voluntary separation program for select U.S.-based management employees. Other charges related to business rationalization and asset amortization further contributed to this dip.
Adjusted EBITDA, a key profitability metric, increased to $12.5 billion, up from $12.2 billion in 2023, signalling that Verizon’s underlying business remains strong.
Verizon’s Strategic Moves: MyPlan, MyHome, and More
Verizon’s CEO, Hans Vestberg, emphasized that the company’s strategic initiatives resonate well with customers. New product launches like MyPlan, MyHome, and Verizon Business Complete have been well-received, helping the company stay competitive. In addition to product launches, Verizon’s brand refresh has further boosted its market presence.
Verizon’s announcement of its pending acquisition of Frontier Communications was a significant strategic move. This acquisition, coupled with an agreement for Vertical Bridge to lease and manage thousands of wireless communication towers, positions Verizon for continued growth in the wireless sector. These deals will further enhance Verizon’s network coverage and operational efficiency.
Postpaid Churn and Customer Retention
Customer retention remains a critical focus for Verizon, and the company continues to make strides in reducing its postpaid churn rate. For retail postpaid phone customers, the churn rate was reported at 0.89%, while overall retail postpaid churn was slightly higher at 1.16%. These figures reflect the company’s efforts to keep customer churn at bay, ensuring a stable and growing subscriber base.
Verizon Consumer Segment: Steady Growth
Verizon reported a 0.4% increase in total revenue in its consumer segment, reaching $25.4 billion for the quarter. Although wireless equipment sales declined, wireless service revenue grew to $16.4 billion, driven by higher postpaid average revenue per account (ARPA) and a growing fixed wireless customer base.
Notably, Verizon’s consumer wireless business saw 81,000 net additions in postpaid phones during 3Q 2024, compared to 51,000 net losses in the same period last year. This improvement marks the seventh quarter of year-over-year growth in postpaid phone gross additions.
Verizon reported 80,000 net additions in the prepaid space, excluding its Safelink brand, which caters to government-sponsored connectivity programs. The company also added 209,000 fixed wireless and 39,000 Fios Internet subscribers during the quarter.
Verizon Business Segment: Continued Growth in Mobility and Broadband
Verizon’s business segment, which serves small and medium businesses, enterprises, and public sector customers, continued to see positive results in mobility and broadband. Business wireless service revenue increased by 2.9% year-over-year, reaching $3.5 billion for the quarter. Substantial net additions in mobility and fixed wireless services and recent pricing actions drove this growth.
The segment added 281,000 wireless retail postpaid connections, including 158,000 postpaid phone net additions, underscoring the sustained demand for Verizon’s business mobility solutions.
However, Verizon Business faced some challenges, with a 2.3% decline in total revenue due to continued drops in wireline services. This remains an area of concern as businesses transition to wireless and digital platforms, reducing reliance on traditional wireline services.
Outlook for 2024: On Track to Meet Financial Guidance
Looking ahead, Verizon remains confident in meeting its full-year 2024 financial guidance. The company expects total wireless service revenue growth of 2.0% to 3.5% and adjusted EBITDA growth of 1.0% to 3.0% for the year. Earnings per share (EPS) are projected to be between $4.50 and $4.70, reflecting Verizon’s commitment to delivering value to shareholders while managing its capital expenditures, which are expected to range between $17.0 billion and $17.5 billion.
Wrap Up
Verizon’s 3Q 2024 results highlight a company successfully navigating a challenging economic landscape while maintaining strong growth in its vital wireless and broadband segments. The company’s commitment to customer satisfaction, strategic acquisitions, and disciplined financial management positions it well for continued success in the telecommunications industry. As Verizon moves into the final quarter of 2024, it is well-poised to deliver on its financial targets and further enhance its leadership in the market.
Selva Ganesh is the Chief Editor of this Blog. He is a Computer Science Engineer, An experienced Android Developer, Professional Blogger with 8+ years in the field. He completed courses about Google News Initiative. He runs Android Infotech which offers Problem Solving Articles around the globe.
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