Verizon Communications recorded relatively healthy first-quarter 2025 results with adjusted earnings and revenues beating the respective Zacks Consensus Estimate.
The company recorded consolidated retail prepaid net additions of 137,000 in the quarter – the best since TracFone acquisition. However, both retail postpaid and retail postpaid phone net additions contracted owing to elevated pricing actions in the Consumer segment and pressure from federal government accounts.
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Net Income
On a GAAP basis, net income in the quarter was USD 4.98 billion or USD 1.15 per share compared with USD 4.72 billion or USD 1.09 per share in the prior-year quarter. The improvement was primarily attributable to top-line growth. Excluding non-recurring items, quarterly adjusted earnings were USD 1.19 per share compared with USD 1.15 in the prior-year quarter. The bottom line beat the Zacks Consensus Estimate by 3 cents.
Revenues
Quarterly total operating revenues improved 1.5% to USD 33.48 billion with growth in service revenues and higher wireless equipment revenues driven by targeted pricing actions, customer growth, sales of perks and add-on services and growth in fixed wireless access. The top line beat the consensus estimate of USD 33.32 billion.
Quarterly Segment Results
Consumer: Total revenues from this segment improved 2.2% year over year to USD 25.62 billion on higher service revenues. The segment revenues exceeded our estimate of USD 25.23 billion.
Service revenues were up 2.3% to USD 20.07 billion, while wireless equipment revenues improved 0.9% to USD 4.53 billion. Other revenues totaled USD 1.02 billion, up 8.2% year over year.
Wireless retail postpaid churn was 1.13%, while retail postpaid phone churn was 0.9%. The company recorded 41,000 Fios Internet net additions as high demand for reliable fiber optic broadband was spurred by higher video consumption. Fixed wireless broadband net additions were 199,000 for the quarter. However, Verizon registered 58,000 Fios Video net losses in the quarter, reflecting the ongoing shift from traditional linear video to over-the-top offerings.
The segment’s operating income increased 0.7% to USD 7.42 billion with a margin of 29%. EBITDA improved 2.7% to USD 11 billion with a margin of 42.8% compared with 42.6% in the prior-year quarter due to lower costs of wireless equipment.
Business: The segment revenues were down 1.2% to USD 7.29 billion due to lower wireline revenues, partially offset by growth in wireless service revenue. It was also lower than our estimates of USD 7.35 billion, largely due to challenging macroeconomic conditions.
The segment had 94,000 wireless retail postpaid net additions in the quarter, including 67,000 postpaid phone net additions. Wireless retail postpaid churn was 1.52%, while retail postpaid phone churn was 1.15%. Fixed wireless broadband net additions were 109,000 for the quarter.
Operating income improved to USD 664 million from USD 399 million in the year-ago quarter with respective margins of 9.1% and 5.4%. EBITDA was up 10.3% to $1.68 billion owing to an improvement in wireless service revenues for a margin of 23.1% compared with 20.7% in the year-earlier quarter.
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