Verizon Communications Inc. reported a first-quarter FY22 sales growth of 2.1 percent year-on-year, to $33.6 billion, beating the consensus of $33.5 billion. Adjusted EPS of $1.35 was in-line with the consensus.
Total wireless service revenue was $18.3 billion, up 9.5 percent Y/Y, reflecting the first full quarter of TracFone ownership. Service and other revenue were down 2.5 percent due to revenues lost from Verizon Media Group.
The quarter marked 229,000 total broadband net additions and 35,000 wireline broadband net additions (driven by 60,000 Fios Internet net additions).
Total Verizon Business revenues were $7.7 billion, down 0.9 percent Y/Y. Total Verizon Consumer revenue grew 10.9 percent Y/Y to $25.3 billion. Consumer wireless service revenues rose 11.2 percent Y/Y, ending with 36 percent of its account base on a premium tier.
Consumer wireless retail postpaid churn was 0.95 percent, and wireless retail postpaid phone churn was 0.77 percent. The competitive dynamics drove wireless retail postpaid phone net losses of 292,000 due to a decline in gross additions of 2 percent. Verizon Consumer had fixed wireless net additions of 112,000, with sales boosted by Verizon’s launch of the C-Band spectrum and the “5G Ultra” campaign.
The consumer segment EBITDA margin was 41.4 percent versus 40.3 percent a quarter earlier. The business segment EBITDA margin was 22.5 percent versus 23.5 percent a quarter ago. Adjusted EBITDA of $12 billion was down 1.1 percent Y/Y.
Chair and CEO Chairman and CEO Hans Vestberg saw the January launch of C-Band and expansion of its 5G Ultra Wideband network amplify its fixed wireless momentum in both Consumer and Business, with quarterly additions 2.5x its Q4 performance, and drove momentum in wireless upgrades.
Outlook
Verizon lowered the outlook for FY22 organic service and other revenue growth to flat compared to the earlier ~3 percent. It expects FY22 reported wireless service revenue growth at the lower end of the previously guided range of 9 percent–10 percent.Verizon sees FY22 adjusted EPS at the lower end of the previously guided range of $5.40–$5.55.
