Verizon Communications (VZ) 22 Jul 222022 Q2 Earnings call transcript

Good morning and welcome to the Verizon Second Quarter 2022 Earnings Conference Call. [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. Brady Connor, Senior Vice President, Investor Relations.

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

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

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

pre-tax second items quarter. pre-tax earnings a mark-to-market including charge on take second million for to a for the $XXX per we related the basis. net of second consolidated a of adjustment quarter, GAAP approximately Reported earnings $XXX let’s pension look reported a share special at include earnings Now, loss a In from $X.XX quarter liabilities. million, of approximately our

related intangible amortization of assets In and of impact million. TracFone was addition, other the to acquisitions $XXX

turn over Hans through of quarter. share quarter. $X.XX of the Excluding us in special per call a the these second to now that, will second the With was take recap items, earnings adjusted to I effects the

for and joining Good us you morning, thank today. everyone

been barometer not for was or a has quarter second it’s going. Our where Verizon where good

know issues the reaccelerate While the the we And our half already are to second satisfied what are. in we executing performance, we of not with are year.

consumer performance wireless expectation by Based and since, the updating and consumer competition significant service per is environment of for adds. adjusted volumes. other are And our said clearly weaker attention. earnings few are quarter The behavior. guidance lowering earnings provide intensified impacting a our we a our result seeing first and As saw call revenue, gross consumer inflationary our The this enhancement in Matt our [ph] for minutes. reiterated financial I also we on impact landscape, share. detail adjusted more quarter and on will in we EBITDA was

of that you responded. our we the meet have needs know, without providing Unlimited device subsidies. will already week, Last budget-conscious launched consumer for Welcome we consumers wireless As plan

addition metered legacy of took Unlimited our In units to business actions both plans, per adjusted pricing to prices revenue increasing for pressures. these to consumer, plan step-ups new while we mitigate In motivating plans, inflationary in also offerings. we our some

improved us operational All ever, of than is the in More through performance customer-focused XXXX. XXXX strategy second focused for position our team executing these our half into on of actions solutions. and and leadership

market evolves. have While refine consumer approach place, will right we in confident that continue as to we I am our the the strategy

plans high-quality us consistently I economic are have our our the to and in pursued & know promotions consumer plan drive looking market, July. XX% with continue in while June unlimited disciplined prices. approach working to improve bringing how are Consumer with premium premium further the to pressures gives offers In We also to May, of ability and into and services carefully customers Match offering Group needs. Looking This momentum Group, our a business, that business. define the and that reflected over XX% strategy the we meet we Consumer disciplined their new the see we performance to of am in competitive facing do Mix to we at on and at adoption, our closely long-term. operate unlimited. the our is confidence our introduced base personally continues on plans

have drive growth. room is which there to step-ups ARPA We five for more. for continues And consecutive seen quarters, healthy

budgets continue services to that new our are are find we we handset valuable consumer strained, ways While delivering seeing becoming sustainable not the recognizing of in are industry subsidies while long-term.

Unlimited example a Our great Welcome this. new is plan of

challenging with full onto segment tailored Consumer across range another to to network. is needs have We and TracFone in offers In for to our all prepaid postpaid of offerings integration prepaid of value the suite on value consumers and bring segment, provides premium this of us from market consumer condition. meet our the schedule

development us the wireless access Group. imaging wireless FBI adds Business net bandwidth wireless our business, fixed system computing, quarter data phone This will to Global announced the over cloud transmission network wireless Group, to delivered In Enterprise excellent like we institutions meet In adds, again the $XXX and global million including over in and team an by driven with video our XXX,XXX applications. phone we net Our Bureau and adds power week, to will and increase This Consumer provide our XXX,XXX and government with agencies quarter, first help we net the consumer net direct adds. we and enhancements XXX,XXX XX% postpaid importance new market, solution by the marks fixed our project XX% bring Verizon’s consecutive recognize Across demands, its continues the volumes, third connections. exceeding a our from access of to quarter. other advise businesses, continue of digitalization. increased

more partnered to complex a its Seaports network organizations. scalable XG across XG private with solutions private build campus. is Virginia with network to secure replace This the WiFi We Terminals International also optimize recently We offer connectivity. to

gateway can for customer the to are growth, and advantage We highest are including compute, new game-changing and uniquely moment seeing to new is customer the organizations. positioned to edge outcomes, private revenue experience from the mobile networks other which Private Verizon take enterprises savings. solutions demand and increased opportunities of these cost customers. provide quality network these and networks deliver

areas. and of Nashville During is in expanded Verizon’s XX of MEC miles within now zones reached North In AWS our XX,XXX square that now population XXX Tampa quarter, XG we the second Tourist, of the supported by we partnership innovation This launch U.S. center metro XX% Edge. bringing ecosystem means the and the Charlotte, with Wavelength to technology foot Carolina.

the The leader application he in gives range to forward. across the of segment. how a As He been founding and consumer create by innovators Financial and for POPs The that of to a track the strategy. within This right quarter the industries X and XXX customers C-Band the enterprise and global power Service trend optionality our our market XG team in as networks on private we and global We XXX end member of Sampath our a hub million is our network who will covered help for create of of will expansion a July for at year. protection ended digital continued send-off program, capabilities edge a infrastructure residence us know and networks, and on CEO, reach part than take the compute. Business CEO in And growth play MEC in the understanding of us in million has at development amazing security. brings XG role a momentum meet agility of continue two years. Verizon needs business. I We the The opportunity with growth in deep network networks Business critical Verizon promoted flexibility experience we are leader is across to Group for the in remain least is larger of and her the Business Verizon to POPs X. Sampath of by speedy creates Verizon. and Verizon’s as career on the mobile ending decades XX-year fitting Erwin, Tami over more

into announced in markets early additional doubling available U.S., spectrum of we XX With deploying March, markets started for an many service XG. the almost in we the the clearance C-Band megahertz are have XXX spectrum and across expanding that

end traffic is than XXX% accounts phenomenal the since is the expected. wave C-Band uses first We Where base reach are year-to-date. usage seeing nearly to wireless they with XX% up the XG. the up equipped Currently, Network our year with need use that quarter devices on by quickly, has millimeter XX% deployed, for are performance more growing Consumers a consumer traffic XG a our number of we expect third also XX% phone of to average. and of end. we C-Band it and

in performance dependability. country quality recognized X for best gave and Our us continues overall the awards for And for to J.D. time Power highest in row. for a number network XXth XXth us for earn This performance the time network recognition wireless in month, RootMetrics the the already-best years. of its having network the

to of Turning give to This sign the actuate on also yearly to top measures sheet ensure remains strong for year, cost program business benefits reason them month, the the efficiency us. our and added, will and market our our a the our with half This second continue that stay customers up, to transformation, we to we of and balance delivered. will enhance ahead. upgrade listen multiyear

business the and on growing of are horizon the costs. We goal controlling our with

investing from shy in never initiatives. portion our cost growth will a We our of away savings

are for creating efficiency growth, our our value deliver both while in confident We long-term shareholders. ability to and

I for and details Before mention to want give to outlook that our reached you tentative turn it labor year, more over collective the to it the half Matt. a opportunities I results provide Matt over to deal our extension the customers business I years. second to unions on agreement. with grow of with bargaining that, stability our hand we will our By This us over and on next X extend our our focused to

Thank morning and you, good everyone. Hans

meet and a this ourselves. have our Hans did we As not challenging expectations said, was results for set quarter the

implemented the to to we remainder environment be the market the actions position of better competitive XXXX. continue future. multiple have to expect At Verizon same for for the very We time,

results for Slide results discussing of the through with expectations Before year, mobility the remainder postpaid our let’s from an walk second the quarter, of on beginning X. overview our

and new helped plans ARPA. selected mobility for base Premium to second progress XX% remained to base value at in consumer make step-ups within quarter in customer postpaid end driving increase existing increased year-over-year our the This and on runway is good the growth we XX% in our X.X% Our continue of accounts Unlimited Premium drive a into consumer our healthy. quarter quarter. activity penetration higher predicated base data within and

show price on customers’ the Our we benefit revenue ARPA to few the last quarter, of and a recent began economic and in trends expect while increase charge the metered our in quarter’s and days second quarter fee to up administrative third full than adjustment the bills adds to second Business offset softer reported postpaid in We in uplift. an throughout changes net net quarter quarter, will in more be the business third as phone phone strong adds postpaid additional XX,XXX will performance. the provide XXX,XXX consumer phased quarter. results delivered which of close

gross business to strong We this lines and phone nearly of the across continue from continue. demand group, the adds expect same period XX% to up a were year see we performance all strong ago as

the postpaid in main from On XXX,XXX net the quarter were consumer and phone stemmed side, losses two drivers.

increased from the protection expiration of compared same roughly the last by Higher the phone an the in year, stimulus coupled was contributed churn to less increase decline by half driven gross points of state churn competitive XX% in consumer adds period and XX to First, marketplace. involuntary policies offerings the funding. basis prior This with year. the due

premium they more own price-conscious new for with who Welcome well attract willing the Match acquisition new core adoption. plans. Premium for available our we device base, serving and in serve the high-value that drive plan within our spending basic opportunities or promotions consumers, Unlimited and drive exist most device. throughout loyalty in to consumers the introduced offers to also adjustments our customers. Unlimited higher quarter, Unlimited to for our no is is features most offering make we indicated, plan their & due reflecting inflation. those bring of Mix a better recently many elevated these This Hans believe We reserve order As plans Upgrade while to as activity to to positioned retention It especially demand particularly effects customer greater select customers, other to generous of remained

across consumer same As up a from X% last year. the postpaid phone activations were result, business and period total

Slide broadband now X. Let’s performance on discuss

scale fixed our and quarter, of expansion we continued nationwide opportunity and During to with businesses broadband grow additional wireless covered. households the second

softer an quarter in the In track addition, additional add net subscribers XQ. expect availability adds of and quarter. in incremental XXX,XXX during XXXX expanded Fios increase throughout Fixed seasonally wireless trend we in month broadband homes up to adds in a to traditionally to XXX,XXX increased quarter, our have target and sequentially quarter. Fixed quarter, XX,XXX on added XXXX. XXX,XXX open is wireless that what XXX,XXX we Total the are of every net as in third momentum from accelerated XXX,XXX were for continue homes in the the achieve sale we

also adds We second quarter. during Internet the added XX,XXX net Fios

While new we to that gross levels, introduced Mix Fios & home well are Fios Internet recently fewer churn seeing our aligns pre-pandemic activity Fios to account Match remains lower-than-expected penetration. positions adds fixed pricing wireless below due and from better We X.X moves switching purchases. and us joint and grow softer

Now, on market Slide value let’s about talk the X.

customer through on TracFone Our remains migrating on team integration delivering customers Verizon is the enhancing proposition focused the off-net track onto of the synergies cost and value and network.

prepaid in results Verizon net base of competitor’s adjustment XG of losses prepaid TracFone XXX,XXX the related total a second exclude shutdown. were had Our quarter and to These a losses net XXX,XXX. brands XXX,XXX

Our aggressive postpaid prepaid promotions. by were impacted volumes

TracFone As progress migrate wanting we be on serve positioned to customers we integration offerings. our those made better to to will initiatives, postpaid

into Our second anticipated business case half integration year. subscriber of losses to we continue phase the of the period, the early during which expect the had

Prepaid make we shift quarter, customer to see expect the modestly remain basis to the would benefits. we to a value in on recessionary should it market expect sequential and concerns forward. was stable and up $XX.XX However, going some preferences ARPU

and were was of and the quarter offset Service strong declines the than as for ownership Verizon revenue of as the revenues Total net wireless XX. consolidated primarily was offset business and TracFone. net lost X.X% revenue revenue other wireline incremental Adjusted EBITDA Media by last for consolidated M&A our strategy total from revenue on our billion from volumes. Premium to progress the growth down divestiture revenue activity. $XX.X a On down more and quarter, revenue was and move due higher service wireless year’s primarily subsidies activations, year-over-year declines results let’s device increased impact the Now, higher financial X.X% cost relatively the and Slide flat X.X%, pressures. inflationary further equipment service Media, driven growth wireless was associated to promotional spending year-over-year, the by TracFone, of on revenue Unlimited Verizon with wireline wireless basis,

and we notably pressures inflation, and within our expenses. Regarding labor cost seeing most utilities logistics are structure, transportation on the costs,

and in accelerate impact an expect year half these We earnings. second have of to the pressures the and on profitability

quarter related As primarily adjusted highlighted, was the EPS adjusted higher EBITDA from results the and our year. Hans the down $X.XX, second Brady prior for X.X% D&A C-Band rollout. reflects This to our impact of and

declines. revenue same period TracFone, our Now, growth. and by billion, same by down year-over-year, voice for driven to last results. equipment core EBITDA let’s Consumer XX.X% the wireless period the and X.X% versus inclusion video revenue look revenue of growth Wireless year-over-year, the Total was take flat inclusion financial a $XX.X Total consumer consumer offset compared and of year. grew driven service a ARPU quarter at the higher growth. up the revenue, TracFone X.X% revenue postpaid ago, Fios service was as second internet year by quarter was was also

TracFone Our by higher contribution Consumer was in was more the promotional offset quarter. margin higher than from activity. XX.X% EBITDA primarily

X.X% we migration its medium on to amid while down a from in legacy Wireless Now, accelerating points declines And more quarter Enterprise which billion for growth while remained and at to and softening was second year. The the part on this its revenue consecutive from the EBITDA continue. Slide currency since Business service due to and let’s continued up XQ, process Global XXXX. quarter. weigh were elevated segment’s wireline impacted financial momentum, basis prior was of together voice wireline XX. Small technology services. of from X.X% trend $X.X the last best data XXX in declines this headwinds. ongoing the USF, by foreign than continued strong business performance federal expect growth and Business continued had for growth the look take X.X% quarter, quarter, Business a quarter, results secular first strong business secular year-over-year. wireless service results The economy close

addition in experienced quarter. the the in to in device In wireless declines, was second elevated subsidies revenue the activations XX.X% we wireline to increase EBITDA quarter. related year-over-year margin XX%

Moving for capital the XX activations activities totaled in net cash levels capital the to inventory on of the balance reduction compared operating driven EBITDA year interest with $X impacts due $X flow from flow $X.X a by C-Band device billion, the Capital than The months. quarter was the improvement billion to with of bonds $XX.X on adjusted cash increase totaled first $XX.X from sheet rising operations net from primarily year, result $XXX.X $X.X spending less free is to increased We rates, the working unsecured half cash billion, Slide of management of resulting for billion of the XXXX spending of unsecured billion in of is spending a $X.X billion the the of compared In summary, first debt, X.Xx. sequential The and first chain the as in $XX.X flow billion. current period. year. for in next a flow to of higher net of cash an XX last our with of strong part and period exited a maturing half half of year environment. billion supply in our debt of billion ratio unsecured position, prior

wireless contribute expect service to update Lastly, the updating Based for We remainder the guidance let’s we are to year. range on half revenue second the of range. The actions pricing expectations, current the XXXX. our X.X%, $X billion our of prior now of implemented in guidance an to XX% move year. from to to on for be the growth down are already expected in approximately X.X% the X%

expected activity of benefit offset lower impact to this the However, and of be net is the impact adds. accounting by promotional

As range a other of minus result expectations and and growth service anticipated the we X% expect revenue in to of revenue the ongoing wireline reduction now to in service pressures, wireless flat. be

We we full This accounts lowering of expectations X% prior flat activations and X.X% of levels our outlook are previously, wireless the revenue to revenue higher range inflation-driven our in the costs growth activity, minus of to that service versus a wireline X%. for business EBITDA headwinds. our revised year promotional to discussed range for by driven adjusted reduction

assumes margin be with typical expected the XQ the EBITDA first in the margins year. Consumer in margins XXXX guidance of to Our Business with to first those reported in in of line be to second half, EBITDA half similar XQ. seen in seasonality in half are the

expectations adjusted as are $X.XX Finally, in EPS EBITDA to interest $X.XX guidance about range our full compared a This fund as $X.XX the versus million additional the $X.XX versus our beginning incremental last for of we estimated of to range. to reflects $XXX for we $XXX lowering quarter, the well updated the Fed year at with expense due rate $XXX of expectations market increases. the million year prior the fee to cash full year million reduction to adjusted

the billion we prior of Thank questions. $X In back value. our for us concluding capital business-as-usual CapEx, $XX.X I billion to for will and are to long-term comments up and closing, turn For to to confident in you. to believe generate we now Hans strategy assets open $X before guidance call $XX.X shareholder billion are that well reiterating we C-Band-related our spending. of billion position

challenges quarter we second you, In summary, view short-term. Matt. half this Thank as and

and sheet. strong disciplined a dividend deliver our environment, model policy this on remain uncertain results, to delivering business times. improved well investments through as In shareholder revenue network healthy even financial economic that long-term value balance favorable well generation supports resilient and in strong suited with and profitability, is that cash focused as have We we and a

both integration solidify deliver. proven taken our our powerful Consumer they actions of TracFone. new ready postpaid wireless Consumer We also and in Fixed to Business continued actions the access solution. for we The have Those consumer in and have include I industry, an business to has the best plans and team a creates to opportunity performance. be connectivity know are

the expect and presence We to nationwide base broadband grow fixed well our our subscriber future. into wireless

drive to wireless expand continue ecosystem. and subscription We business MEC our

with the Taken our in to together, the And our and and competitive during will quarter listen efficiency marketplace. work, actions address challenges. accelerated respond customers our continue thoughtfully combined we our to

Network-as-a-Service five quarter are questions. second to Brady, Thank to you. initiatives designed growth. drive our which our all, vectors capacity, power of strengthen back uses of to you to ready your for network and our Our we’re the from take results

for we’re questions. Brad, Hans. Thanks, ready

you. Brett Instructions] from Your question [Operator sir. Thank of go Feldman Sachs. comes Please first Goldman ahead,

customer questions, delay AT&T if you two specifically seeing base. a collections were that cited And Yesterday, their they of don’t the mind. Thanks. payments, in from consumer

anticipating curious, you price was taken debt seen macro Consumer is, question to the bad better really what’s of you position tougher? DSOs I outlook, in if business. bit far is need anything remains outlined phone third you’ve back of in out the have from expense? at you. steps mostly sufficient taken in Consumer year? the And And think a steps do net your all the of embedded especially plan then second the point your any And positive that So so standpoint second some Wireless do get some execution-driven? sort have or of the are postpaid you’re the stretching to to it Thank half quarter or you there in, you else this think to Is at you or point you a adds

of with you, part can start Thank I it. Brett. the second

of then, I all the have and on we you the actions own done increases pricing way the have quarter, As taken we mean, And new bring our we several said, actions no from with device course, the also aggressive have subsidy. Unlimited your plan taken. in

with model. think evaluate we discipline something that be we that. about long-term But do But to it’s the very need sustainable we taken conscience now we’ve more. to if subsidized So I the because don’t continue constantly in will market,

in then policy and out. policy will we So

be course, season, a Of will course, holiday that it’s there. of

work if we’re that But the will in our clearly do. with at look one. also, segment, But well. is, that we Premium you really remember our value doing will – this So high end,

We have to cost quality high customers.

You step-ups the see continuing.

what we’re addressing now. Unlimited, conscious it. addressing right price that’s now the with we are and So which And is metered are right low-end more what

So more here. decisions blanket we are making any surgical just than

on good. that, we of very good that’s So TracFone. top feel about And

Of course, And if going, different high-quality I ship if I have work from the and we need all clearly, is the we’re customers. TracFone. even close want always in we to meet about Because would see market customers. market Matt, how team, turn on worse, time mean we But and preserve financial how where staying our weekly will need can we But the we adjust. you extremely to comment we in the cash. to we play then we we We and bring customer maybe all base. demand Manon always before think to customers. can think discipline – her segments And with Matt. and

Yes. Thanks, for Hans. the thanks And Brett. question,

Hans, comment high-quality in last So customers, Brett seeing. patterns the we’re and your actually on building up there, shows payment about that

slightly the writing, be We payment continues than pre-COVID, DPP at higher. you in from period. quality in portfolio haven’t with any good, very were line the seeing deal we’re better when business scores And have never in customers, time noticeable what in FICO of seen our patterns to that been the we change much very the look fact,

the we customer of type you that the see to expect continuing we’re time, have. from would base payment in that strong point patterns high-quality this at So

Thank you.

are we for the ready Brad, Brett. question. Thanks, Great. Yes. next

Simon Thank Morgan you. Flannery question The from Stanley. next is of

is sir. line Your open,

Good Great. Thank morning. you.

about a your new other plans? you incremental also ability to noted from great Unlimited taking swings for deteriorating one offers And that a up of maybe welcome driving bit did this to the well? is through taken, deteriorated marketplace, to the later quarter, early secondly, times in the Thank really of saw? as are a that Has the you’ve recently of those QX. pricing you. actions traffic last trade with consistent seeing $XX. the pretty door XQ little traffic trended customers higher reads and the move part around give talk recent offer of And to maybe to customers the You further? of Or etcetera. Unlimited increases offer? then these you sense increases, quarter at the few you both you’re those price that but Could as the as into in some price store get war, traffic store well digest plans Be it Is any us how levels it

On let add start and Matt me will the prices, there. in

Of took coming in see the on year. of the pricing adjustments, and we into second course, with price that, will plan metered the we increases play actions half and this

that So that that cost expect calculating and do – might There will course, we’re are consumers we some some with. of disconnects will, be it. of that conscious

market or early On is the been Welcome Unlimited, It’s X think, X too bit little the which the I a in only segmentation for, of to say. Unlimited market, it’s days. a

have the see opportunities clearly, early from we’re step-ups say. also customers. that of taken anything quarter. outflows – a to having aggressively little part with markets addressing it’s as think the in plan. some So more? second market the we We where we in bit this well we But had action Matt, plan that for a our And

would Simon. No, about the just I one $X as in versus in that or that year Hans’ of we I’d get a plans taken. expect meet the their customers actions to assumed my of forward expect, in they half. see significant probably That’s billion second those and actions benefit churn third thing add will else. the But view, incremental our we as small mentioned price in first to a see the half we sequentially Certainly, expect from I revenue benefit in bubble second that, my from we’ve in have result we taken. apart the the response, of see comments. from here increases half significant or we’ve quarter in the whatever to

– maybe traffic And I the sorry, I answer realized store on there, didn’t that.

trends. stores said we less second the April in in the little a the bit and of nothing just We in first working our had pickup quarter and other little of but still March. we than through be part below a might special. quarter, bit now. saw May latter But and how right as that, But earlier June, in it’s that market So some and traffic the

a Great. lot. Thanks

Simon. ready next Yes, thanks, are for we question. Brad,

Thank Cusick is of from JPMorgan. you. question next Phil The

Your is line open.

guys. Hi,

as on I hand, And with prices mean can. First sound don’t But if to this fees. raising follow-up, disrespectful. you’re I one

hand, like and know discounted to the offers. in out call credits you’re of market. I you’re complain And loyalty other offering the who On bringing about it customers seems And lower-priced you’re pricing.

your So you’ve position in something Or your going about having to to through to dominance, network time do its think you you do get order really think a sorry you with to you. return maintain to a need is but Thank I’m readdress of it. you few can I’m sort hard that period? talked this really times competitive to already, return share? and

Thank you, Phil.

network well. the of First really quality as you of about and our It’s feel us all, network. we better good as and ever hear the than actually talking

on over million. at the is just we midst the in are of C-Band extremely it, And performance just strong rollout, it. million plus least XXX on see XXX which year-end POPs are the by passing We and we

getting many So customers we’re the going the of more benefit C-Band. to have

So feel about revenues. now good our that we

RootMetrics. the saw You

– us the having the Power saw best You J.D. both and network. the of well as as

clear, that’s clear now, to feel I Phil. don’t What is very we that we’re – have think you doing different. – So be right

We the market. are segmenting

of plan, plan. Unlimited metered So a the we segment Welcome and the where have now that’s

the increase plans, good end, see as as in of see we why have And Matt in we high have and continues. that’s we On really loyalty. saw that’s – said, step-ups. we the We step-up. in we see this outlined ARPA quarter, our continuous the sort Exactly what we

not only So is I’m working. confident strategy our I think, think,

in We’re time. just addressing a segment this economical

So And the and I It are getting on because high-quality good believe on. we cash how really loyalty. base that good feel it. we of about means also important. right build strategy continue will very to very be we focused flow customers, and to do type customers And a the means

good we your the about about So I feel anything it. Matt, good feel but else? I strategy. really question, understand

that one XX of of not Phil, get last clearing is, we agreement those of turning the megahertz, on time XXX we’ve C-Band. outside the that markets, but XX a be And when megahertz on what XXX on But versus in the satellite add I’d megahertz very the strong we’re thing amount we’d some expect. an done things other only a the on we’ve to initial And during line the deployed, maybe mentioned going it’s with markets. we like reached C-Band companies we we’re the what today. further. current network uptick early Hans, seeing quarter, have in Yes. But exactly is get the We very, the path us to full that performance. difference really it C-Band in an speeds seeing tells to with with even we’re XX

to So will well. to strategy we network-driven continue allow a believe perform very that us absolutely

That’s helpful. Thanks, guys.

Thanks, Phil. Brad, we question. for are the ready next

The you. Thank of Hodulik next is question UBS. from John

open. is line Your

there Hi, the base from an trend build fixed is this you you John. of for wireless Thank here? that you as further? And fixed of an to addressable to talk opportunity you. percent update expect Is about to Verizon. maybe is new a wireless bit what trends C-Band maybe market Can Betsy expand little how

in just Group. is growth we great exactly the I rolled fixed Intelligent of Consumer in Verizon multiple the us XXXX, when opportunities And Network have our Hey, XX% question. growth. vectors Edge national of address network. first growth, out we us. we the This we five we the And all, feel to vectors, about for deploying good course, mean, all market. broadband. that have humming wire This in really what No, actually of one about XX% of the envisioned was can is

XG Of both, wireless the course, performance but good coverage access, a they the enormous have we and an fixed as C-Band wave we gave and in millimeter have well.

So as faster. and hitting are we rollout going we more to even grow we can households,

your Betsy, [indiscernible] right is working expectation, will all is about. nothing that less adds I it in when our feel comes movements, environment, that our etcetera, household strange. the we opening on course, So we and to Fios was we’re opportunity the have performance now base to is though this from really on guess, Fios We little of a to bit Fios, But from because and little churn. marketing even lag remember, good really of our a base households. bit good the as direct through. But customer less the and to also But continue we time feel about have good net grow it network because opening of most

all high all, And as has the on expectation broadband well. have I Matt national strategy the So from expectations. in was beginning. this is good playing really high us. for a

from Matt? the executing Our commercials. our to teams network are

of just Pat, for would About on wireless. adds, new, fixed data point new call maybe relationship where existing we have with what Hey, so you our Verizon, an FWA XX% we to didn’t them. one

new customer we obviously, adding on pretty service. and But well. like when platform, existing bring of Verizon completely a you customer that’s an the the So as a exciting taking ability

hopefully, that So your question. helps

Great, thanks.

Brad, we next ready Thanks, are Betsy. question. for the

The of is America. Barden next from question Thank of David Bank you.

open. Your line is

agreement to us the have about week. for time of I you Thanks. CB a doing of that be could principle the I numbers, it Could then, of agreement collective talking It $XXX maybe from rate the pricing floating inflation? one, Can Matt, expenses and talked that presumably the talk number of incremental of taking question. plans, million for? first it we budgeting that’s couple my guess some $X impact Thanks out dollar guys. threw exposed you’re debt. math from Hi, top we’ve headwind some about, incremental the what’s other $XX line inflation around the about Kind billion we thrown of interest on numbers and billion benefit And out of inflation about have or talked dangerous in why locking a seems around I why kind headwind, signed, like now? we that and happening about And there? kind think when think with are dollar talk you right capital bargaining supply in you inflation into of and to comfortable passing now chain then working we agreements. equipment multiyear feel number is potentially you last this what we the Hans, mentioned this you

Matt?

Dave. Thanks Yes.

for you question. thank the So,

you to So, there that, about about billion the the that growth level we as points the of look, down from inflation sequential the of X% to at that think EBITDA year marketplace. plans the assumption that full year certainly and are the And the X% basis that’s is for of at original EBITDA points of to what beginning running that balance flat, than the going the based thought we reduction have But of level the basis uptick. to the X.X% our of are as minus we level, that say, the XX see for in $X is at spend got type to off is XXX a you of the coming higher revenue year offset making from we in promotional the there the for assumption are our then to seeing based guide you versus in year.

a capital increasing now, have lower balances artificial On was favor the playing gave a had have caused us of you capital by capital. down. came again. couple to Transaction that volumes COVID see some last in is, EPP volumes working came That of down. over working of We as course, couple One volumes headwinds there. side, got things we the years, some working

which, will got EPP we versus more have And XX-month increase on pre-COVID. normal to saw the levels, of balances reverting top of so you what to outstanding moving that amount

We flow question. to union achieve through flow going through would the the the see for period. half but Hans, I less working see the generation of what that’s headwind will we about right in cash So, feel a that about – the to chunk current good you we in of will will that this of will free this a large it expect hand forward work I this certainly year. year, And cash very work now. and as we business you over capital

supply a course, of And secured that unions, want have we as When the have a remarks, you. And a supply tentative you our union my comes a plans. supply our job the earlier And them. with around have in our network to chain doing way said say. see around great chain that. we agreement I of chain with that are maybe and our can the great reached we C-Band on because that. the else say I discussion has have I that’s And on partnership on we on agreement I it there we in were how mean chain, millimeter wave that the ahead union. reached, mean lot to is our Yes. and I in to Verizon secure have everything really the comment of a Thank whole supply rollout done

this important think one. we So, an is

we that the working have great see have the workloads to union. have continue relationship that and to future see You the secured a with we in we

agreement. So, this that’s why have we tentative

Great.

Thanks the Dave. Brad, we next for are question. ready

Thank you. The next question Rollins Citigroup. is Michael from of

open. is line Your

Thanks and good morning.

the of sales and terms guidance revenue just about EBITDA competitors and behavior You curious wireless just strength other, in in then the what your industry for talked kind are I the was the year. in profitability. to of afoot company out Related of coming what the traditionally you there are performance. consumer larger how shift that’s of terms this possibly buying your the revenue Business there underneath one just businesses happening I the thinking that discussing the coming something informs within of stronger also in also way where that, terms wireless? the for established Wireless between of relationship curious into? market? are some And is So, about about am are is is of change previously business segment. segment am term this and seeing talking And am in And multi-year performance this you are outlook that I if longer

you. Thank

now really for you us On quarters have a seen good wireless, having the run it. on several business

is our good And such a traction mission-critical and see networks conclusion that’s why confidence our we customers. level is for it. so that Our high important on our

probably leakage and and medium small are consumer, between I the in consumer normally, medium. or some to small think it’s and from there small also it’s but medium,

seen before, don’t So, always what it’s is between. I but than anything that movements different I in some think type of have

So, network. our performing how we business wireless our like our really and feel about good how customers are and they

a it’s Long-term, we that also as short-term times said are think I second great challenging right market. this I mean confident a question, we On is before, now. the

our plans. We can And we have great on assets. execute

am ourselves positioned broadband here, we and a divestments the our digital X and long-term have last a So, are for assets the mobility, couldn’t in years cloud network, good in today. with businesses. to the for that consumers position dream – another have have we I really done have whatever important we where most and market acquisitions, with strategy I

confident of else? the about am Matt, I business. So, our long-term anything

you Obviously, back if COVID Yes. had maybe couple disruptive just Verizon very the Mike, pre-COVID, was segment. to very of Business performance. things. Group think Hans, strong a Business

growth, will on are as growth pace. work continue but taking certainly feel like we go going strong have a And year forward the be we Hans we seen not a that the in quarter, point, to and up you on show the we over are comment service seeing that to expect strong. here. continue actions And on past now up multiyear adds up put And row at in revenue You are have at as us said, path a outlook do to taken now. the net this to and two very recovery sequentially quarters EBITDA that in X% to this

look to, on updating into obviously, get as forward we that year. you next So,

employees buying like X to involving years X of And out of and because them environment, companies than is a follow-up, of there what communications like felt shift buy get bigger to today, quick ago? pandemic maybe years, differently working just devices for kind different where With going behalf from could. if that wireless trying hybrid to through or work-from-home Is this they One that I are employees. the their on emboldening were now, their environment. years for and of services and of kind actually is we work

Thanks.

supplying secure a now – office seamless right we want see where experience what we to going to back little for dependent business I we down But handset into, bring of I see actually private we actually years to an customers, say. coming on enterprise see direction experience of see trend to XG a more a from and networks, street wireless of little and mean think from you I are actually enterprises. is the more the of trend a need about that seamless and It’s it. Verizon’s a deploy we devices device type saw actually Then more going bit the customers. they commercial have in a our own customers actually order you now. a both. going manage over I see your in wireless to everybody the XG on company having – then out inside Think building network. the have bit order But

So, both. actually we see

as trend, an on So, don’t accentuated it’s I can think this at taking level. tell least I from the question

to lot about just that mean York didn’t another give On thing, want sometimes I I in the remember, well. the data talked handoffs point people New other move. a as XX% during I City down was in networks COVID

years. much hands to seems It course, buckets. are equally now the that’s means We high back on we of we look that But the and handovers. a That moving of are to are have more. we little what much in deployed the how But on X depend course, a equipment different It’s, level, when more as doing actually like pre-COVID. handovers can of people see. we – at network, even normal right are that bit back

Thanks.

for Thanks the Mike. ready question. Brad, next we are

next The comes Craig of question Moffett Thank from you. MoffettNathanson.

Your line is open.

the revisit we have comments years XG. maybe we wonder couple Thank I growth, think of Hi. Hans, you. as about past some you about the over made of

to off latest the is couple hoped? has right be think of thing? big and the networks some and Verizon that about broad opportunities, relates like the as opportunities the Is those bit would of once there and edge As I road bloom back, mobile not there your sort as what years promising evolved, sort attractive is investors is both as for revenue that that have among sense – the compute we so a the specifically for they it new a may that, it is opportunity, seem a of thinking market of industry for and private as and

access, have first, if take if I way all fixed the that we for If was is wire C-Band, good you in do. definitely really megahertz deployed the happening about Craig. network said, And is we The XG. there of can wireless XXX. the problem. you, that have XX we that it. I in deployed models fixed Thank questioning the as something We everybody no three different mean the actually take in feel average is we network is Matt business capacity

more have to go. So, so much we

definitely happening. So, that one is

mobility, XG yes, is little mobility, challenging. bit a more the short-term On

the the think situation economical see I market. in from I both same. that Long-term, comes

plans As ARPA quarter, up. before, opportunity us. And step-ups is saw said in the going great and this you to went for as our higher a I

up. high-end Our continued customers to do step

XX%. phone. And by both year-end, customers a So, of XG be near are least happening. of And probably at has our those we would XX%

So, those happening. I are think

contrary, compute we you a right IoT, also the it in compute, now, in edge On bit and trend good on networks little that, a really and bring and XG have experience cloud the mobile has private goes starting mobile with it. edge when to then over

a saw more So, announced see in see smartphones. are that. having going good so devices now and about a devices in now talking why not And the is networks. WiFi happening only private coming reason We high-capacity order we of many you many several secure cases. have it’s out. next And right to instead that That’s years, are XG of couple quarter, more the to we and the customers replacement feeling them network for during more

all the So, have that time. I the feel we that talked it is opportunity same about

environment, I that’s always mobile spot world a might are it. we XG build And the We the Given compute that’s network. how it. long-term, leader it us. no in the be feel some sweet private in But we and that, see changes for difference economic to And edge networks.

We where other and use are. good have we been all feel very early XG as case the well with being time really

your for general, the great this confident a understand Craig. that, opportunity in I well, But market. So, question, I is am

you. Thank Great.

next Craig. Yes. Brad, we are Thanks ready question. the for

is next from Kannan The Thank Venkateshwar. you. question

Your line is open.

Thank you.

price bigger at And couple. of your despite the cable and revenue the service absorbing that base telco have that’s you revenues, So, when down growth maybe increase and growth I done, the increase guidance it’s AT&T. a was from first, growth a mean a than what price negative. of and perspective, part you was EBITDA look

this need growth, to So, year. terms I you beyond levers, on of other order in to margins in lean guess grow may

us seems are, And that could there how then the your is us environment over amount and you levers of event mean up around the be inventory understand last just built starts macro expect quarters to we great keep especially there quarters sheet. you you those if if So, would I an weaker? help if handset what two on intact? the some clearing secondly, should understand enormous of or Thanks. have a you getting the could margins kind three your balance It what be if holidays. help objective do

Kannan. you, Thank Yes.

are mean comes of First margin, many here. there it all, to to when levers I the run

to course, vectors of to have Of remember, see that course, grow. good And one five of have is continue we we opportunity growth.

worse, environment market but all and value access, economic and actually of if fixed some them them the that, like our that. TracFone wire is might turning of in the And well of hands with more are many impacted a like be in playing like brand

efficiency what and opportunity of we able times tougher And we be programs performing, now we tougher it’s for have I So, always to with work expand we as going again, are Matt programs in and has order having the And work be being adding cost. And we times, feel to to have prepared that efficiency with cost if constantly. several some to cost. those I on market. or mean then, invest outlined enhancing by in others. course,

every will we that we we with. and we should environment confident that on continue And it. doing the any working things So, company have. on be all have that toolbox I team day, am at we little for But an know I It moment. And is think that we are think feel here. have the a I is that’s what are to we bit complicated, the it I

are confident strategy. our about We

confident that disciplined We confident be we time. and our are we through will generation, financially this about Matt? are cash

add high for forward to really side. nothing a obviously will apps expectations number margin of the And we we There are on produce. the results – will Hans, have for us. we Yes,

both to On also supply from a of question, there that, a was took of that the a fashion. in physical say ability chain, market inventory to we obviously I chain’s part around more the smart the was and the decision of think availability your in factory approach way us item the to deliver supply uncertainty predictable item

to levels closer historical And you you certainly, feel There have is rates to of And of to the cushion supply return can in in product. levels levels our about predictability scope levels. more the see supply difference have would account absolutely, chain us price inventory for we model. built inventory inventory the so certainly into the to expect the the we reduce. But I that opportunity comfortable some is chain the of as for once see

you. Thank

Thanks Kannan. ready are next Brad, the for question. we

of Frank from question next The you. comes James. Raymond Thank Louthan

Your line is open.

what that What to expect can understand with network where consumer Great. to more the up are And about positive the see like subs. kind you we we the at Is Thank to promotion a year? to the a current some at the bit get in back forth, and – approaching that with are to little I can to expect And strategy? so point any would show start your you growth can seeing into confidence subs government? you. point, us there? in changes something market next that something then more of Can you talk business we see turn? out but

you, Yes. Frank. Thank

business. the And bit of contracts. Let longer little me course, business – the in a with governmental start business with governmental

renovation for up then. come they course, now Of and

supplying much all happens I digitalization what segment business think is as with more more the equally and well, digitalization about enterprises support much applications the models much in that ways see working. we of with us and with and them as

with that been we that. yesterday, as of good. one governmental agency And has included So, definitely them one announced

order we we and are the in really network technology that from, the enterprise services government so and which given playing to So, that network applications, market think think digitalization, the the have our latest technology, side? as their in going happening. the well have going includes what’s that an see way have And on everybody we Matt, see same fiber I that’s confidence the employees consumer I wireless into, with their technologies.

Yes.

we in a I bit we through because customer So the during actions would some work pricing the competitive here the expect a in – do see quarter as the of little the quarter. marketplace, look, in holiday taken. We to in obviously, of new reaction launches continues fourth a to get team expect churn topple device third problem to season have the effectively earlier. compete as into mentioned I to we

disciplined So, obviously continue will And then start year. as with I we work show as that the to would we be. market to to different to to be fashion in of on expect need us numbers time up a the at competitive

you. Alright. Great. Thank

time Thanks Frank. Brad, we have for one last question.

you. Thank

Credit Your final question will Suisse. Mitchelson of come from Doug

open sir. is line Your

you. as Thanks from as we is commentary handset have your I on strong subsidies so much. about heard Hans, think

you then promo streaming am dollar on believe just well? should price-conscious to gives consumer subsidies expect side, thinking, mileage with just value or For streaming value your or a with for reconsider well? as bundled it customers premium the more to broadband price handset as you a your offering something just well. new customers customers, Obviously, you I we as home is factors going your home might probably and to do that that streaming that’s work over much than better swing plan is the subsidies, Verizon, have streaming at like those XG other have or subsidies,

Just thinking Thanks. about curious evolving you offering? are price-sensitive the how

you. Thank

segment, still. Premium or services on all, important the we think high it’s in value or others, that’s very of type the of First And the in different end we have if Disney+ have liking it. we industry we prominent really with can forefront of these the of customers think been in ever exclusive see about. most this And brands you type the deals our with

second in as Day, year want a continue to customers. announced for to And do high-end platform partners. Plus the us of as that a well – during the Investor our for at we turned customers. launch aggregation has will our Play, half and for also which And really out we this digital subscription our well We that is for

But many is majority say the up signed basically, there You brands everyone in because the have us. seen wouldn’t I with market. of the important has

distribution both So, network of customers best leverage sort as service for and our us in we a will but continue the return to also for service on and have order investment. to

popping with services the good distribution work in that. digital feel marketplace, see you mean about to direct-to-consumer we nowhere the I And biggest with in place, direct-to-consumer just all the over market. So, is subscription better the working Verizon than that has as up

inbounds. of lot a have we So,

do right. to going it are We

that and articulated, our our the as surgical to both and on prices of hitting that. unlimited and it. segment it now, and subsidy all working We diligently, is to that be and on plan. changes, to that metered right team shareholders has the comes step-ups the segmentation, from in all low-end and about are And clearly of going been on try customers question see we our When benefiting and are

to in are bundle things. to opportunities going see We there have other and

fixed our with are for access are very working good We customers our with proposition. customers value already wireless offering wireless that

need there to very if quarter, see So, will things strong we we have, in And confidence think some over we that bundle we in. are here continue time. actions a are the other now, right that positioning. we see will taking But I improvements to aggressive continue and

Alright. you. Thank

today. the all that’s for questions Brad, have Doug. Thanks we

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

may disconnect. You now