01—Abstract
Summary
Summary of the 8-K filed January 24, 2025. Cited figures are marked; the original filing is the authoritative source.
Verizon's 8-K furnishes its fourth-quarter and full-year 2024 results (Exhibits 99.1 and 99.2).
Full-year 2024 total operating revenue was $134.8 billiona, up 0.6%, and reported diluted EPS was $4.14 versus $2.75 in 2023. Adjusted EPS, which excludes special items, fell to $4.59 from $4.71, so underlying earnings declined despite the reported improvement. The comparison is distorted by the prior-year $5.8 billion Verizon Business goodwill impairment.
Full-year consolidated adjusted EBITDA rose to $48.8 billionb from $47.8 billion, and free cash flow improved to $19.8 billion from $18.7 billion, helped by lower capital expenditures of $17.1 billion versus $18.8 billion. Operating cash flow slipped to $36.9 billion from $37.5 billion, reflecting higher cash taxes, higher interest expense, and about $600 million of fourth-quarter severance payments, partly offset by a one-time roughly $2.0 billion contribution from the Vertical Bridge tower transaction. Fourth-quarter operations were the strongest highlight.
Management reported 568,000 postpaid phone net additions, up from 449,000, and total postpaid net additions of about 1.4 million, described as the best quarterly result in more than a decade. Consumer wireless service revenue grew 3.0%c and postpaid ARPA rose 4.2%. Broadband momentum continued, with 408,000 net additions and fixed wireless access reaching nearly 4.6 million subscribers.
Quarterly EPS of $1.18d included a $477 million pre-tax net gain from special items, mainly a $668 million pension and OPEB remeasurement gain offset by $191 million of intangible amortization. Quarterly adjusted EPS was $1.10 versus $1.08. Business segment performance was mixed: wireless service revenue grew while wireline revenue continued to decline.
For 2025, Verizon guided to total wireless service revenue growth of 2.0% to 2.8%, adjusted EBITDA growth of 2.0% to 3.5%, adjusted EPS growth of 0% to 3%, operating cash flow of $35.0 billion to $37.0 billion, capital expenditures of $17.5 billion to $18.5 billion, and free cash flow of $17.5 billion to $18.5 billion. Leverage improved, with net unsecured debt of $113.7 billion and a net unsecured debt to adjusted EBITDA ratio of 2.3x, down from 2.6x a year earlier.
The company also noted the pending Frontier acquisition as a factor in its strategic outlook. Investors should weigh the strong subscriber and cash flow trends against flat-to-modest adjusted EPS guidance and ongoing wireline pressure.
02—Key points
Key Highlights
- Full-year 2024 reported diluted EPS of $4.14, up from $2.75, but adjusted EPS fell to $4.59 from $4.71
- Q4 2024 postpaid phone net additions of 568,000, up 26.5% year over year, with about 1.4 million total postpaid net additions described as the best quarterly result in over a decade
- Full-year 2024 free cash flow rose to $19.8 billion from $18.7 billion, driven by capex falling to $17.1 billion from $18.8 billion
- Net unsecured debt declined to $113.7 billion, and the net unsecured debt to adjusted EBITDA ratio improved to 2.3x from 2.6x
- 2025 guidance calls for adjusted EBITDA growth of 2.0% to 3.5%, adjusted EPS growth of 0% to 3%, and free cash flow of $17.5 billion to $18.5 billion
- Q4 2024 reported EPS of $1.18 was boosted by a $477 million pre-tax net gain from special items, mainly a $668 million pension/OPEB remeasurement gain
- Business wireline revenue continued to decline (down 8.0% in Q4), offsetting growth in Business wireless service revenue
03—Questions
Frequently Asked Questions
Why did reported EPS rise sharply while adjusted EPS declined?
The 2023 results included a $5.8 billion Verizon Business goodwill impairment, which depressed reported EPS. Adjusted EPS excludes special items, so it fell modestly to $4.59 from $4.71 on a like-for-like basis, reflecting higher interest expense and other operating pressures.
What drove the strong fourth-quarter subscriber results?
Management attributed the results to strong gross additions, with postpaid phone gross additions up 4.6% year over year, along with pricing actions, the second-number offering, and broadband growth from Fios and fixed wireless access. Excluding the second-number contribution, postpaid phone gross additions grew 1.4%.
Is Verizon's free cash flow sustainable in 2025?
The 2025 free cash flow guidance of $17.5 billion to $18.5 billion is below 2024's $19.8 billion. The 2024 result benefited from a one-time roughly $2.0 billion tower transaction contribution, and 2025 operating cash flow is expected to be $35.0 billion to $37.0 billion, which implies lower free cash flow despite planned capex in a $17.5 billion to $18.5 billion range.
What are the main risks flagged in the outlook?
The filing's forward-looking statements cite competition, pricing and promotional intensity, high indebtedness, litigation, benefit plan costs, and the ability to consummate and realize synergies from the pending Frontier acquisition. Continued wireline revenue declines in the Business segment are also a visible pressure point.
04—Continue