10-QPeriod: Q2 FY2021

VERIZON COMMUNICATIONS INC Quarterly Report for Q2 Ended Jun 30, 2021

Filed July 28, 2021For Securities:VZ

Summary

Verizon Communications Inc. (VZ) reported strong financial performance for the second quarter and first half of 2021, driven by significant revenue growth across its Consumer and Business segments. Total operating revenues increased by 10.9% in Q2 2021 and 7.4% for the first half compared to the prior year, reaching $33.8 billion and $66.6 billion, respectively. This growth was supported by robust wireless equipment sales and continued strength in service revenues. The company's strategic investments in network expansion, particularly 5G, are underpinning this performance. Significant capital expenditures were noted, including substantial investments in C-Band spectrum. Despite these investments and ongoing operational costs, Verizon demonstrated solid profitability with net income attributable to Verizon increasing to $5.8 billion for the quarter and $11.0 billion for the first half. The company also announced progress on strategic divestitures, including the pending sale of Verizon Media, which is expected to close in the second half of 2021.

Financial Highlights

48 data points
Beta

Revenue

$33.76B

Net Income

$5.80B

17.2% Net Margin

EPS (Diluted)

$1.40

Total Assets

$349.19B

Cash & Equivalents

$4.66B

Free Cash Flow

$10.74B

Financial Statements
Beta
Revenue$33.76B
SG&A Expenses$7.32B
Operating Expenses$25.60B
Operating Income$8.16B
Interest Expense$844.00M
Net Income$5.80B
EPS (Basic)$1.40
EPS (Diluted)$1.40
Shares Outstanding (Basic)4.14B
Shares Outstanding (Diluted)4.14B

Key Highlights

  • 1Total operating revenues increased by 10.9% year-over-year to $33.8 billion in Q2 2021 and by 7.4% to $66.6 billion for the first six months of 2021.
  • 2Net income attributable to Verizon increased to $5.8 billion for Q2 2021, up from $4.7 billion in Q2 2020.
  • 3The Consumer segment saw revenue growth of 11.2% in Q2 2021, driven by wireless equipment and service revenues.
  • 4The Business segment reported a revenue increase of 3.7% in Q2 2021, primarily due to growth in Public Sector and Other, and Small and Medium Business.
  • 5Verizon made significant capital expenditures, with $8.7 billion invested in the first half of 2021, including substantial outlays for C-Band spectrum licenses.
  • 6The company is progressing with its strategy to sell Verizon Media, with the transaction expected to close in the second half of 2021.
  • 7Free cash flow for the first six months of 2021 was $11.7 billion, a decrease from $13.7 billion in the prior year, reflecting higher operating cash flows and reduced capital expenditures.

Frequently Asked Questions

Verizon reported a strong second quarter in 2021, with total operating revenues increasing by 10.9% year-over-year to $33.8 billion. Net income attributable to Verizon increased significantly to $5.8 billion, up from $4.7 billion in the same period last year. This growth was driven by strong performance in both the Consumer and Business segments, supported by increased wireless equipment sales and service revenues.

The Consumer segment experienced a robust 11.2% revenue increase in Q2 2021, primarily due to higher wireless equipment sales and growing service revenues. The Business segment also saw positive growth, with revenues up 3.7%, driven by increases in the Public Sector and Other, and Small and Medium Business categories.

Verizon continues to invest heavily in its network infrastructure, particularly in 5G technology and spectrum acquisition. The company spent $8.7 billion on capital expenditures in the first half of 2021, including a significant portion for C-Band spectrum licenses obtained in February 2021. Strategically, Verizon is also divesting non-core assets, with the sale of Verizon Media expected to close in the latter half of 2021.

Verizon generated $11.7 billion in free cash flow for the first six months of 2021. While this is a decrease from $13.7 billion in the same period of 2020, it reflects continued strong operational cash generation and strategic capital allocation, with a planned moderation in capital expenditures compared to the prior year. The company expects to continue funding its operations, dividends, and investments through internally generated funds.