Latest news with #VerizonValueGuarantee
Yahoo
2 days ago
- Business
- Yahoo
5 Revealing Analyst Questions From Verizon's Q1 Earnings Call
Verizon's first quarter results met Wall Street's revenue expectations, with adjusted earnings per share exceeding consensus estimates. Management attributed this performance to the success of recent pricing actions, ongoing broadband growth, and disciplined cost control across the business. CEO Hans Vestberg highlighted the company's portfolio of targeted customer offerings, including myPlan and myHome, and noted positive momentum in gross additions toward the end of the quarter. The prepaid segment, in particular, achieved its best results since the TracFone acquisition, driven by revamped value propositions and expanded distribution. While higher churn was acknowledged—primarily among cohorts impacted by recent price increases—management described this as transitory and linked to specific pricing adjustments made earlier in the year. Is now the time to buy VZ? Find out in our full research report (it's free). Revenue: $33.49 billion vs analyst estimates of $33.33 billion (1.5% year-on-year growth, in line) Adjusted EPS: $1.19 vs analyst estimates of $1.15 (3.6% beat) Adjusted EBITDA: $12.56 billion vs analyst estimates of $12.34 billion (37.5% margin, 1.7% beat) Operating Margin: 23.8%, up from 22.8% in the same quarter last year Market Capitalization: $176.5 billion While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. John Hodulik (UBS) asked about the impact of tariffs on equipment and handsets. CEO Hans Vestberg explained that tariff exposure is limited on capital spending, and any significant handset tariff increases would likely be passed to consumers rather than absorbed by Verizon. Ben Swinburne (Morgan Stanley) questioned whether the improvement in gross additions was due to specific promotions or market share gains. Sowmyanarayan Sampath, Consumer Group CEO, attributed the momentum to the Verizon Value Guarantee offer, noting double-digit growth in April gross adds. Jim Schneider (Goldman Sachs) inquired about changes in consumer behavior and the sustainability of business margins. Sampath reported continued demand for premium plans, while CFO Tony Skiadas highlighted structural cost improvements and stable payment trends. Michael Rollins (Citi) asked about postpaid phone industry growth and the impact of immigration policy. Sampath stated that Verizon is performing well even as much of market growth is driven by prepaid-to-postpaid migration, a segment where Verizon participates primarily through partners. Peter Supino (Wolfe Research) asked how the company's multi-year fixed wireless access expansion could pressure capital expenditures. Vestberg responded that the rollout is incorporated into existing plans and should not create additional pressure through 2028. Looking ahead, the StockStory team will be monitoring (1) adoption and retention trends following the rollout of the three-year price lock and free phone guarantee; (2) progress on the integration and broadband expansion linked to the pending Frontier acquisition; and (3) continued improvements in prepaid and converged customer segments. Execution on operational efficiency and network investments will also play a critical role in shaping future performance. Verizon currently trades at $41.94, down from $42.93 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it's free). Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
Yahoo
24-04-2025
- Business
- Yahoo
VZ Q1 Earnings Call: Verizon Highlights Customer Retention and Broadband Growth Amid Stable Results
Telecommunications giant Verizon (NYSE:VZ) met Wall Street's revenue expectations in Q1 CY2025, with sales up 1.5% year on year to $33.49 billion. Its non-GAAP profit of $1.19 per share was 3.6% above analysts' consensus estimates. Is now the time to buy VZ? Find out in our full research report (it's free). Revenue: $33.49 billion vs analyst estimates of $33.33 billion (1.5% year-on-year growth, in line) Adjusted EPS: $1.19 vs analyst estimates of $1.15 (3.6% beat) Adjusted EBITDA: $12.56 billion vs analyst estimates of $12.34 billion (37.5% margin, 1.7% beat) Operating Margin: 23.8%, up from 22.8% in the same quarter last year Free Cash Flow Margin: 10.9%, up from 8.2% in the same quarter last year Customers: 146 million, down from 146.1 million in the previous quarter Market Capitalization: $180 billion Verizon's first quarter results reflected management's focus on stabilizing subscriber trends and expanding its broadband footprint. On the call, CEO Hans Vestberg and Consumer Group CEO Sowmyanarayan Sampath emphasized that targeted pricing actions, new customer offers such as the three-year price lock, and the ongoing expansion of fixed wireless and fiber broadband were central to recent performance. Sampath noted, 'Our Verizon Value Guarantee is resonating well, providing predictability and value that customers are seeking in the current environment.' Looking ahead, management described a strategy anchored in further convergence of mobility and broadband services, disciplined cost control, and continued investment in network quality. While executives expressed confidence in achieving their 2025 operational and financial objectives, they acknowledged headwinds from external factors like tariffs and ongoing industry competition. As Vestberg stated, 'We are well positioned to deliver sustainable growth, but remain vigilant given the evolving policy landscape.' Verizon's leadership attributed the quarter's financial performance to disciplined execution across consumer and business segments, progress in its multi-year transformation, and product differentiation. They highlighted several operational and strategic developments shaping both the current quarter and the path forward. Consumer value initiatives: Management pointed to the launch of the three-year price lock and free phone guarantee as a response to consumer demand for predictability and value. These offers were designed to retain customers, reduce churn, and attract new subscribers, particularly as price increases in late 2024 had driven some customer losses. Broadband expansion momentum: The company continues to prioritize growth in both fiber (Fios) and fixed wireless access (FWA). Leadership said Verizon is ahead of schedule in expanding Fios passings and expects to increase its fixed wireless subscriber base, with a long-term goal of reaching 8–9 million FWA subscribers by 2028. Turnaround in prepaid business: Sampath detailed a significant turnaround in the prepaid segment, with 137,000 net adds—its best result since the TracFone acquisition. This improvement followed enhancements to value propositions, distribution, and operational rigor in prepaid brands like Visible, Total Wireless, and Straight Talk. Business segment progress: The business unit reported continued margin improvement, aided by cost management and growth in private networks, IoT, and AI Connect offerings. Recent deals, such as those for AdventHealth and Nucor, illustrate traction in enterprise connectivity and managed services. Tariff and macroeconomic considerations: Management addressed potential impacts of new tariffs on equipment and handsets, stating that exposure is limited on capital expenditures, but handset tariffs could ultimately affect consumer pricing. The company remains prepared to adapt its approach as the policy environment evolves. Verizon's outlook for the remainder of the year is shaped by its focus on customer retention, expanding converged offerings, and managing cost pressures from industry and macroeconomic factors. Converged product adoption: Management expects continued growth in customers adopting both mobility and broadband services, which historically produce lower churn and higher revenue per user. The integration of offerings like myPlan and myHome is central to this strategy. Cost discipline and efficiency: Executives highlighted ongoing cost transformation programs, including automation in customer care and voluntary separation initiatives. These are expected to support margin expansion and offset competitive pressures on pricing. Tariff and industry risk management: While management believes broader economic and regulatory changes—including tariffs—pose uncertainties, they plan to pass significant handset tariff costs to consumers if necessary and maintain financial discipline on promotions and capital spending. John Hodulik (UBS): Pressed for details on how new tariffs might impact Verizon's device promotions and upgrade activity; management stated that only a small portion of capital spending is exposed and that significant handset tariffs would be passed through to customers. Ben Swinburne (Morgan Stanley): Asked about the drivers of improved gross additions in March and April; executives credited the new three-year price lock offer and emphasized that recent growth was company-driven rather than a broader industry recovery. Jim Schneider (Goldman Sachs): Questioned whether consumer behavior or upgrade cycles had shifted due to economic concerns or tariff speculation; management reported stable customer payment trends and attributed recent upgrade activity to the new value guarantee offer. Michael Rollins (Citi): Inquired about the outlook for industry-wide postpaid phone growth and the impact of changing immigration trends; Sampath indicated that Verizon's core markets remain healthy and that improved prepaid performance is not reliant on immigration-driven growth. Peter Supino (Wolfe Research): Sought clarification on whether expanding fixed wireless access could pressure capital expenditures or margins; management responded that FWA expansion is incorporated in current plans and should not create outsized future cost pressures. In the coming quarters, the StockStory team will be watching (1) whether the three-year price lock and free phone guarantee can materially reduce churn and boost net subscriber additions, (2) the pace and effectiveness of Fios and fixed wireless broadband expansion, and (3) the revenue and margin contribution from the turnaround in prepaid and scaled adoption of converged offerings. The outcome of the pending Frontier acquisition and policy developments around tariffs will also be important signposts for Verizon's execution. Is VZ at an inflection point that warrants a buy or sell? Find out in our free research report. Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years. Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today. Sign in to access your portfolio
