Q2 2016 – Verizon Earnings Call Summary

Verizon

Below are my key takeaways from the Verizon Q2 2016 Earnings Call on July 26:

Summary:

Agreed to buy Yahoo’s operating business for $4.8B (technically in Q3), which they see as a compliment to their AOL purchase last year.  Acquired a private company called Telogis for its suite of connected vehicle solutions.  Saw new revenue streams from the Internet of Things, or IoT, grow by 25% to $205MM.

Completed the Frontier deal of selling systems in California, Texas and Florida for $10.54B. Negotiated new labor contracts will generate $500MM in cash savings over the term of the contracts.

Converted go90 application to the AOL platform.

Financial Metrics:

  • Total Revenue: $30,532MM, -5.3% YoY
    • Q2 2015: $32,224MM
  • Operating Income: $4,554MM, -41.8% YoY
    • Q2 2016: $7,821MM
  • Net Income: $831MM, -80.9% YoY
    • Q2 2015: $4,353MM
  • EPS: $0.17, -83.7% YoY
    • Q2 2015: $1.04
  • Wireless Revenue: $21,704MM, -4.0%
    • Q2 2015: $22,613MM
  • Wireless EBITDA: $10,299MM, +3.8% YoY / Margin: 47.5%
    • Q2 2015: $9,921MM / Margin: 43.9%
  • Wireline Revenue: $7,823MM, -2.4% YoY
    • Q2 2015: $8,013MM
  • Wireline EBITDA:$1,099MM, -26.5% YoY / Margin: 14.0%
    • Q2 2015: $1,496MM / Margin: 18.7%

Subscribers Metrics:

  • Total Wireless Connections: 113.2MM, +3.3% YoY
    • Q2 2015: 109.5MM
    • Postpaid: 107.8MM
      • Net Additions: +0.615MM
      • Churn: 0.94%
    • Prepaid: 5.374MM
      • Net Additions: -0.003MM
      • Churn: 1.19%
  • FiOS Video: 4.637MM, +1.6% YoY
    • Q2 2015: 4.565MM
  • FiOS Internet: 5.495MM, +4.9%
    • Q2 2015: 5.240MM
  • FiOS Digital Voice: 3.879MM, +2.4% YoY
    • Q2 2015: 3.788MM
  • Verizon High Speed: 1.519MM, -16.5% YoY
    • Q2 2015: 1.820MM

List of Key Properties:

Forward Thinking:

  • Wants to compete with Google and Facebook over digital ad revenue
  • Looking to NFL and NBA to expand sports content on their mobile properties
  • Developing infrastructure for eventual 5G launch in 2017

Links to Company Website:

Please comment below if there are data points from Verizon you’d like me to include in their next Earnings Call Summary.  

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