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:
- Verizon FiOS
- Verizon Wireless 3G/4GLTE/5G
- Yahoo
- AOL
- Huffington Post
- Awesomeness TV
- Complex Magazine
- Go90 (Mobile only streaming video service)
- Hum (Car Diagnostics, Assistance and Location)
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:
- Q2 2016 Press Release
- Webcast of Q2 2016 Earnings Call
- Transcript
- Q2 2016 Earnings Slides
- Q2 2016 Financial Statements
Please comment below if there are data points from Verizon you’d like me to include in their next Earnings Call Summary.