Verizon CEO Hans Vestberg on Q2 Earnings, Profit Outlook, and Tax Reform Benefits

Q2 Performance and Growth Strategy

• 📈 Verizon's strategy is showing positive results, with growth across broadband, fixed wireless access, prepaid services, and adjacent services like perks.
• 💡 The company achieved $12.8 billion in adjusted EBITDA, a 4% growth, and raised guidance for both EPS and free cash flow due to strong financial performance and customer offerings.
• 🎯 Verizon serves all customer segments in the US, from government to consumers, with offerings that are resonating with the market.

Wireless Performance and Pricing

• ⚠️ While Verizon experienced a net loss of 51,000 monthly wireless phone subscribers, the company added over 300,000 new customers across wireless and broadband in the quarter.
• 💰 Price increases in consumer postpaid have contributed to performance, but the CEO did not disclose future pricing strategies, emphasizing strong value propositions for both consumers and businesses.
• 🚀 The focus remains on building the network and adding profitable connections, with service revenue growing 2.4% and overall revenue up 5% in the first half of the year.

Impact of Tax Reform

• 💰 A significant benefit from the recent tax bill is the ability to depreciate capital investments directly, impacting free cash flow by an estimated $1.5 billion to $2 billion this year.
• 📡 The bill also encourages spectrum auctions for future technologies like 6G, positioning Verizon well for long-term spectrum needs.
• ⏳ The perpetual tax benefit will continue into the second half of the year and beyond, contributing to improved financial outlook.

Capital Allocation and Future Investments

• 🏦 Verizon is prioritizing capital allocation towards business investments, maintaining its 18-year streak of dividend increases, and paying down debt.
• 🤝 The pending Frontier acquisition, upon approval, will be factored into a holistic view of capital allocation, potentially including share buybacks.
• 🗓️ A comprehensive capital allocation plan, incorporating the Frontier acquisition, will be presented to the market in the coming months.