The operator introduces the Verizon Fourth Quarter 2023 Earnings Conference Call and explains the format of the call. Brady Connor, Senior Vice President of Investor Relations, introduces the speakers, Hans Vestberg (Chairman and CEO) and Tony Skiadas (CFO). The safe harbor statement is mentioned, along with the availability of Verizon's SEC filings and non-GAAP financial measures. The fourth quarter and full year results have been posted on the Investor Relations website, and special items have impacted the reported earnings per share. The adjusted EPS for the fourth quarter was $1.08.

Verizon CEO Hans Vestberg shares the company's strong performance in the fourth quarter of 2023, attributing it to significant changes made in operations and team structure. The company has stabilized its core business and is now poised for growth and profitability. Highlights include an increase in wireless service revenue and adjusted EBITDA, as well as a strong free cash flow and dividend payout ratio. These results set a solid foundation for Verizon's future success.

In 2023, Verizon focused on capturing market opportunities and investing in profitable growth while also transforming the company to be more efficient. They saw success with the launch of myPlan, which gained 13.1 million subscribers and increased ARPA. Other changes were made, such as establishing a regional distribution model and partnering with HCLTech for customer support. These actions have set Verizon up for success in 2024 and they are confident in their strategy.

In the fourth quarter, Verizon had 449,000 postpaid phone net adds, with improvements in both Consumer and Verizon Business. The company's disciplined and segmented market approach is creating positive results for customers and shareholders. In Consumer, there has been continuous improvement throughout the year, with the best postpaid phone gross adds and net adds in two years. Verizon's customer-centric offers, such as discounted content bundles, are resonating in the market. In the value business, including prepaid offerings, there is still room for improvement but progress is being made. In Verizon Business, there were 131,000 postpaid phone net adds in the fourth quarter, marking the 10th consecutive quarter with net adds above 125,000. For the full year, Business added 562,000 phone net adds.

Verizon's Business customers prioritize mobility and value the option of highly-tailored plans on the best network. In terms of broadband, the company had over 1.7 million net adds, with a significant portion coming from fixed wireless access and Fios. They are consistently adding subscribers and have exceeded their goal for fixed wireless access customers. The company is also seeing success with private networks and 5G business solutions, with interest from large enterprises and contracts with companies like Norfolk International Terminal, Audi, and Nucor. This is a strategic move for Verizon to expand their revenue and establish themselves as a leader in this market.

Verizon has expanded its 5G private network partnerships with the NFL, leading to potential for more business. The network is continuously improving and expanding into suburban and rural markets. The investment in C-Band has resulted in higher customer satisfaction and loyalty. Verizon's millimeter wave technology sets them apart in high density areas. They have been consistently ranked as the top wireless network provider by J.D. Power. In the future, their focus will be on growing revenue, increasing EBITDA and free cash flow, and reducing debt.

The article discusses the financial performance and future plans of a company, with a focus on their wireless service revenue growth, adjusted EBITDA, and free cash flow. The company's CEO and CFO provide details on their strategy and operational performance, highlighting their strong results in the fourth quarter and full year. They also mention their plans for targeted pricing actions in the first quarter of 2024, which may impact their consumer postpaid phone churn.

In the fourth quarter, the company saw positive growth in postpaid phone net adds and gross adds, driven by their myPlan offers and segmented approach to the market. Postpaid upgrades were lower compared to the previous year, but C-Band deployment has shown better performance in markets. The company also saw an increase in premium plan adoption and ARPA, but prepaid results were impacted by weaker retail sales and pricing pressures. Overall, the company is well positioned for growth in 2024.

In the fourth quarter, the prepaid net losses were 289,000. The Visible and Total by Verizon brands experienced strong growth and the team is focused on improving the performance of the Straight Talk brand. Verizon Business had a strong quarter with 131,000 phone net adds and the Business Markets Group had its best performance in two years. In broadband, there were 413,000 net additions, with strong demand for both fiber and fixed wireless offerings. Fixed wireless net adds were 375,000, with over 80% coming from C-Band markets. The growth trajectory for fixed wireless is ahead of schedule and Fios Internet net adds were 55,000.

In the fourth quarter, Verizon saw success with their Fios product, with strong gross adds and retention. They expect this momentum to continue into 2024 with the deployment of C-Band spectrum and expansion of Fios. Consolidated revenue for the quarter was $35.1 billion, with a slight decrease attributed to lower wireless equipment revenue. However, total wireless service revenue increased by 3.2% due to targeted pricing actions and growth in fixed wireless access. Adjusted EBITDA was $11.7 billion, with a relatively flat margin compared to the previous year. Verizon also implemented cost-saving measures in their customer care and managed services, with further progress expected in 2024. Adjusted EPS was $1.08 for the quarter and $4.71 for the full year. Cash flow from operating activities was $8.7 billion for the quarter and $37.5 billion for the year.

In the fourth quarter, the company saw a year-over-year improvement of over $300 million in working capital, leading to a reduction in CapEx spending of over $4 billion from the previous year. Free cash flow for the quarter was $4.1 billion and $18.7 billion for the full year. Net unsecured debt improved by $1.6 billion year-over-year, but increased sequentially due to settling incentive payments for C-Band spectrum. The company expects deleveraging to accelerate in 2024 and only has $3.6 billion of unsecured debt maturing in that year. The company is pleased with their performance in 2023 and is now looking ahead to their 2024 guidance, which shows expectations for accelerating wireless service revenue growth.

The paragraph discusses the projected growth of wireless service revenue and adjusted EBITDA for 2024, driven by positive postpaid phone net additions, fixed wireless access subscriber growth, and other factors. The adjusted earnings per share for 2024 is expected to be $4.50 to $4.70, with certain impacts from higher interest expense and pension and OPEB expenses. Depreciation and amortization are expected to remain flat, and the adjusted effective income tax rate is projected to be between 22.5% and 24%. Capital spending for the year is expected to decrease from 2023.

The paragraph discusses Verizon's plans for free cash flow in 2024, highlighting potential tailwinds and offsets. The company expects a strong free cash flow profile that will support their capital allocation priorities and allow for unsecured debt reduction. The CEO emphasizes the company's confidence and readiness to capitalize on the opportunities of the AI economy, and praises the team's work in 2023. Verizon plans to expand into suburban and rural markets while maintaining financial discipline.

Hans Vestberg, CEO of a company, talks about their strong customer focus and strategy for 2024. He also mentions an upcoming investor event and readiness to take questions. A question is asked about the company's recent growth in subscribers and service revenue, and Hans and Tony give some details and credit their team's performance and network reliability for their success.

The company's go-to-market strategy and offerings are strong, and they have seen sequential improvement in their Consumer side throughout the year. This is due to new offerings like myPlan and changes in structure implemented by Sampath. The team is executing well and will continue to do so. In addition, they have had success in Tier 1 markets and have improved their competitive positioning against all providers. They also have strong momentum in the VBG side. The company is confident in their service revenue growth for 2024, with a guidance range of 2% to 3.5% and a jump off point of 1.3%. This implies over $2 billion in service revenue growth.

In the paragraph, the speaker discusses the assumptions and tailwinds for the company in the upcoming years, such as pricing actions, improving volume profile, and contribution from fixed wireless access. They also mention headwinds, including the drag from prepaid and promo amortization. The speaker expresses confidence in the trajectory of service revenue. The next question asks for more information on fixed wireless, including churn, capacity, seasonality, and exposure to ACP and the BEAD program.

The fixed wireless access product has been successful with over 3 million subscribers, and the company is constantly improving it. The company is also pleased with the longer-dated churn. The guidance assumes that ACP funding will remain intact, but the company has plans to address it if it goes away. ACP has minimal exposure in the postpaid business and a small margin impact.

Hans Vestberg, CEO of a telecommunications company, discusses their participation in the BEAD program and their plans for fiber build. He also mentions their expectation for positive postpaid phone growth for the year and the durability of consumer growth. Vestberg credits their success to their disciplined and segmented approach, specifically their myPlan product which offers flexibility, cost control, and value to customers.

The speaker, Tony Skiadas, discusses the impact of recent pricing changes on churn and growth in the Consumer and Business sectors. He also mentions the positive performance of C-Band and the company's goal to be postpaid phone positive by 2024. The speaker, Phil Cusick, asks for more information on the competitive landscape and Verizon's approach to balancing volume and price. He also asks for an update on the cost-cutting program and its impact on 2023 and 2024.

The speaker discusses their company's approach to pricing and promotions, focusing on offering the right value to different customer segments. They have a disciplined approach and prioritize return on investment for all stakeholders. In 2023, they implemented cost-saving measures and expect further savings in 2024, while also investing in the business. The results of this approach were seen in the fourth quarter.

The speaker discusses changes made in the last year, including a new CMO, to improve retail marketing and address past issues.

Vestberg acknowledges changes made last year and their positive results. Leslie Berland, the new CMO, will work with the team to continue refining the brand and its leadership. Fixed wireless access is performing well in C-Band markets and could potentially double in the future.

David asks a question about the potential impact of cash taxes on Verizon's free cash flow, given the company's projected EBITDA growth, interest expense, and CapEx savings. Hans Vestberg responds by discussing the company's deployment of fixed wireless access in suburban and rural areas, and emphasizes the importance of maintaining a consistent volume and cadence for efficient resource optimization. Tony Skiadas adds that the company expects to see pressure on cash taxes due to the phaseout of bonuses, but also anticipates a tax benefit in 2023 from spectrum clearing payments.

Hans Vestberg, CEO of a telecommunications company, discussed the potential impact of proposed legislation on the company's headwind of $2 billion. He also expressed confidence in the company's offering and the importance of mobility and broadband for society. When asked about market growth expectations for postpaid, Vestberg could not provide a specific percentage but emphasized the importance of the company's products and the industry as a whole. The growth rate in the industry has been high, but Vestberg did not speculate on whether it will continue at that pace or decelerate.

The speaker is discussing the company's plans for the future, specifically in regards to their fixed wireless and fiber businesses. They mention potential changes in their breakeven threshold and competition in the market, as well as the impact of price increases on their wireless service revenue.

Hans Vestberg, CEO of Verizon, discusses the company's broadband strategy and how it has given them optionality in terms of access and pricing for customers. He emphasizes the importance of financial discipline and creating options with their network. On the wireless side, the Business team has been successful in gaining market share and expanding offerings, while the Consumer team has focused more on increasing ARPA through new products and pricing.

Hans Vestberg discusses the company's plans to increase their customer base while maintaining financial discipline and providing quality products. He also mentions the growth in network utilization and the importance of building a stable network. The company's use of millimeter wave technology is noted as a cost-effective way to deliver data.

In the fourth quarter, the company saw an improvement in gross adds, but it is unclear how much of this was due to healthy industry volumes versus improved execution and products. The company has been performing well since the second quarter and has been taking disciplined actions to maintain this trend. There are also reports of lead levels above EPA standards in some of the company's cables, but it is uncertain how this will impact the company.

The speaker discusses the company's performance in the quarter, stating that they were solid and did well. They also mention taking lead seriously and working with agencies to address the issue. The speaker then addresses a question about the impact of localization and changes in the sales organization on the company's performance, specifically in comparison to the impact of a rate plan change.

Hans Vestberg, CEO of Verizon, discusses the impact of localization on the company's growth. He notes that the company has seen sequential growth due to the implementation of localization, but there is still more to be done. The regional structure allows Verizon to be closer to its customers and make decisions tailored to specific markets, which has helped offset price increases.

In paragraph 31, the speaker expresses confidence in the company's future, especially with the rollout of C-Band. They also mention the consideration of share repurchases when the company's leverage reaches 2.25 times, with a long-term goal of 2 times. The Board is aware of this plan and will take into account market conditions before making any decisions. The call ends after this paragraph.

This summary was generated with AI and may contain some inaccuracies.