Financial Performance - The company reported operating income of $76 million for the three months ended March 31, 2025, a decrease of 16% from $90 million in the same period in 2024 [191]. - Total revenue for the three months ended March 31, 2025, was $1.511 billion, a 3% increase from $1.462 billion in the same period in 2024 [212]. - Consumer revenue increased by 3% to $813 million, driven by a 26% increase in fiber broadband revenue, which was attributed to higher average revenue per user (ARPU) and net customer additions [218]. - Business and wholesale revenue also rose by 3% to $682 million, primarily due to increases in data and internet services, despite declines in voice services revenue [220]. - Total operating expenses for the three months ended March 31, 2025, were $1,435 million, an increase of $63 million or 5% compared to $1,372 million in 2024 [234]. - Operating cash flows increased by $184 million to $519 million for the three months ended March 31, 2025, compared to the same period in 2024 [258]. Fiber Expansion - Frontier Communications has passed over 8 million total locations with fiber as of March 31, 2025, with a goal to reach 10 million [184]. - Fiber revenue increased by 13% to $913 million for the three months ended March 31, 2025, compared to $805 million in the prior year [214]. - The average monthly consumer fiber broadband revenue per customer (ARPU) rose by $3.03, or 5%, to $68.21 for the three months ended March 31, 2025 [209]. - Frontier added approximately 321,000 fiber passings and 107,000 fiber broadband customer net additions in the first quarter of 2025 [188]. - The company experienced a consumer customer churn rate of 1.20% for fiber broadband, an improvement from 1.24% in the prior year [205]. Capital Expenditures and Investments - Capital expenditures increased to $757 million for the three months ended March 31, 2025, compared to $666 million in the prior year [262]. - The company has negotiated payment terms with vendors, resulting in capital investment of $773 million for the three months ended March 31, 2025, including vendor financing [266]. - Cash flows used by investing activities were $756 million for the three months ended March 31, 2025, a decrease driven by $91 million in higher capital expenditures and the non-recurrence of $850 million in sales of short-term investments [261]. Debt and Liquidity - As of March 31, 2025, the company had liquidity of approximately $2,529 million, consisting of $506 million in cash and cash equivalents and available credit facilities [250]. - The working capital deficit increased to $1,516 million as of March 31, 2025, compared to $1,029 million at December 31, 2024, driven by various increases in current liabilities [256]. - As of March 31, 2025, there was $1,267 million of undrawn capacity under the $1,500 million DDTL Facility [265]. - The company assessed that operating cash flows and existing cash balances will be adequate to finance working capital requirements and other payments over the next twelve months [269]. - The financial maintenance covenant leverage ratio is set to not exceed 5.25:1.00, stepping down to 4.75:1.00 starting March 31, 2027 [281]. Pension and Employee Benefits - The company's pension plan assets increased by $42 million from $2,328 million at December 31, 2024, to $2,370 million at March 31, 2025, primarily due to market value changes and contributions [317]. - The discount rate for the company's pension benefit obligation was 5.50% as of March 31, 2025, down from 5.60% at the end of 2024 [314]. Regulatory and Compliance - The company is required to complete the CAF Phase II deployment by December 31, 2021, and could face penalties if it fails to meet certain requirements [295]. - The company was awarded approximately $371 million over ten years under the RDOF program to build gigabit-capable broadband to approximately 127,000 locations in eight states, with milestones to be met from December 31, 2025, to December 31, 2028 [297]. - The company is actively pursuing awards from the IIJA, which provides $65 billion for broadband connectivity programs, with approximately $25.5 billion allocated to states in its footprint [298]. - The company is in compliance with all covenants under its existing indentures and credit agreements as of March 31, 2025 [290]. Market and Shareholder Information - The merger agreement with Verizon is set at $38.50 per share, representing a premium of 43.7% to Frontier's 90-day volume-weighted average share price prior to market speculation [185]. - The company issued $750 million in secured fiber network revenue term notes on July 1, 2024, with a weighted average yield of approximately 7.4% [276]. - As of March 31, 2025, 90% of the company's total debt had fixed interest rates, with only $1.1 billion subject to floating rates [310]. - The annual impact of a 100 basis points increase in the SOFR would result in approximately $11 million of additional interest expense, provided that the SOFR rate exceeds the SOFR floor [311]. - The company does not maintain any off-balance sheet arrangements that would materially affect its financial statements [292].

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) Frontier achieved record Q1 2025 revenue and Adjusted EBITDA, driven by significant fiber business growth and surpassing 8 million fiber passings, despite a net loss of $64 million - CEO Nick Jeffery highlighted the strongest start to a year yet, attributing success to continued strength in the fiber business and increasing reliance on fiber networks[3](index=3&type=chunk) - The company reached a significant milestone, expanding its fiber network to over **8 million passings**, progressing towards its goal of **10 million**[3](index=3&type=chunk)[6](index=6&type=chunk) Q1 2025 Key Financial and Operational Highlights (YoY) | Metric | Q1 2025 Value | YoY Change | | :--- | :--- | :--- | | Total Revenue | $1.51 billion | +3.4% | | Fiber Broadband Revenue | - | +24% | | Fiber Broadband Customers | - | +19.3% | | Adjusted EBITDA | $583 million | +6.6% | | Net Loss | $64 million | N/A (vs $1M income) | | Fiber Passings Added | 321,000 | - | | Total Fiber Passings | 8.1 million | - | | Consumer Fiber Broadband ARPU | $68.21 | +4.7% | [Segment Performance](index=2&type=section&id=Segment%20Performance) Both Consumer and Business/Wholesale segments grew revenue year-over-year, driven by fiber expansion, partially offset by legacy copper declines [Consumer Results](index=2&type=section&id=Consumer%20Results) Consumer revenue increased 3.3% to $813 million, fueled by a 25.6% surge in fiber broadband revenue from customer growth and higher ARPU, with improved churn Q1 2025 Consumer Segment Performance (YoY) | Metric | Q1 2025 Value | YoY Change | | :--- | :--- | :--- | | Total Consumer Revenue | $813 million | +3.3% | | Consumer Fiber Revenue | $589 million | +16.6% | | Consumer Fiber Broadband Revenue | $471 million | +25.6% | | Fiber Broadband Net Additions | 103,000 | - | | Fiber Broadband Customer Growth | - | +19.8% | | Fiber Broadband Customer Churn | 1.20% | -0.04 p.p. | [Business and Wholesale Results](index=2&type=section&id=Business%20and%20Wholesale%20Results) Business and Wholesale revenue grew 3.5% to $682 million, led by fiber revenue growth and 4,000 fiber broadband customer additions, despite increased churn Q1 2025 Business & Wholesale Segment Performance (YoY) | Metric | Q1 2025 Value | YoY Change | | :--- | :--- | :--- | | Total B&W Revenue | $682 million | +3.5% | | B&W Fiber Revenue | $324 million | +8.0% | | Fiber Broadband Net Additions | 4,000 | - | | Fiber Broadband Customer Growth | - | +11.4% | | Fiber Broadband ARPU | $99.98 | +1.6% | | Fiber Broadband Customer Churn | 1.53% | +0.21 p.p. | [Financial Position and Outlook](index=2&type=section&id=Financial%20Position%20and%20Outlook) Frontier maintained strong liquidity of ~$2.6 billion and a 4.9x net leverage ratio as of March 31, 2025, with no significant debt maturities before 2027, as its Verizon acquisition progresses [Capital Structure](index=2&type=section&id=Capital%20Structure) Frontier reported total liquidity of ~$2.6 billion and a 4.9x net leverage ratio as of March 31, 2025, with no long-term debt maturities prior to 2027 - Total liquidity of **~$2.6 billion** consists of **$0.5 billion** in cash, **$1.3 billion** in a delayed draw term loan facility, and **$0.8 billion** in a revolving credit facility[10](index=10&type=chunk) - The net leverage ratio was approximately **4.9x** as of March 31, 2025[10](index=10&type=chunk) [Pending Acquisition by Verizon](index=2&type=section&id=Pending%20Acquisition%20by%20Verizon) Frontier's definitive merger agreement with Verizon, signed September 4, 2024, is expected to close by Q1 2026 pending approvals, resulting in no financial outlook or earnings call - A definitive merger agreement was signed with Verizon on September 4, 2024[13](index=13&type=chunk) - The transaction is expected to close by the **first quarter of 2026**, subject to regulatory approvals[14](index=14&type=chunk) [Financial Statements](index=7&type=section&id=Financial%20Statements) Unaudited Q1 2025 financials show 3.4% revenue growth to $1.51 billion, but higher expenses led to a $64 million net loss, with operating cash flow offset by capital expenditures [Statements of Operations](index=7&type=section&id=Statements%20of%20Operations) Frontier's Q1 2025 revenue increased to $1.511 billion, but operating income declined to $76 million, resulting in a $64 million net loss compared to prior year Q1 Statement of Operations Data (YoY Comparison) | Metric ($ in millions) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $1,511 | $1,462 | | Total operating expenses | $1,435 | $1,372 | | Operating income | $76 | $90 | | Net income (loss) | $(64) | $1 | | Diluted EPS | $(0.26) | $0.00 | [Revenue Breakdown](index=8&type=section&id=Revenue%20Breakdown) Revenue analysis shows a clear strategic shift to fiber, with fiber revenue growing to $913 million in Q1 2025, offsetting copper declines, and Data and Internet services revenue increasing Revenue by Technology (YoY Comparison) | ($ in millions) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Fiber | $913 | $805 | | Copper | $582 | $641 | Revenue by Service (YoY Comparison) | ($ in millions) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Data and Internet services | $1,049 | $947 | | Voice services | $290 | $321 | | Video services | $74 | $94 | [Balance Sheet](index=10&type=section&id=Balance%20Sheet) As of March 31, 2025, Frontier's balance sheet showed total assets of $20.9 billion, driven by increased property, plant, and equipment, with total debt at $11.64 billion Condensed Balance Sheet Data | ($ in millions) | March 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $506 | $750 | | Property, plant and equipment, net | $16,221 | $15,678 | | Total assets | $20,898 | $20,614 | | Total debt | $11,643 | $11,561 | | Equity | $4,877 | $4,941 | [Cash Flow Statement](index=11&type=section&id=Cash%20Flow%20Statement) In Q1 2025, Frontier generated $519 million in net cash from operating activities, but investing activities used $756 million, driven by capital expenditures for the fiber buildout Consolidated Cash Flow Data (YoY Comparison) | ($ in millions) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided from operating activities | $519 | $335 | | Net cash provided from (used by) investing activities | $(756) | $186 | | Net cash provided from (used by) financing activities | $45 | $(423) | [Key Operating Metrics](index=9&type=section&id=Key%20Operating%20Metrics) Q1 2025 operating metrics reflect a successful fiber-first strategy, with total fiber passings reaching 8.1 million and 107,000 fiber broadband customer additions, contrasting with continued copper declines [Customer Metrics](index=9&type=section&id=Customer%20Metrics) Total broadband customers grew to 3.153 million, with 59,000 net additions in Q1 2025, an acceleration from prior year, and consumer ARPU rising to $84.40 Broadband and Consumer Customer Metrics | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Broadband customers (thousands) | 3,153 | 3,094 | 2,974 | | Broadband net additions (thousands) | 59 | 37 | 31 | | Consumer customers (thousands) | 3,232 | 3,193 | 3,140 | | Avg. monthly consumer revenue per customer | $84.40 | $83.58 | $83.65 | [Broadband Metrics](index=14&type=section&id=Broadband%20Metrics) The company's fiber buildout reached 8.1 million total passings, with strong consumer fiber net additions of 103,000 and healthy ARPU growth, contrasting with copper customer declines - Total fiber passings increased to **8.1 million** as of Q1 2025, up from **6.8 million** in Q1 2024[43](index=43&type=chunk) Broadband Net Additions (in thousands) | Segment | Technology | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | :--- | | Consumer | Fiber | 103 | 85 | | Consumer | Copper | (41) | (51) | | Business + Wholesale | Fiber | 4 | 3 | | Business + Wholesale | Copper | (7) | (6) | Broadband ARPU | Segment | Technology | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | :--- | | Consumer | Fiber | $68.21 | $65.18 | | Consumer | Copper | $62.39 | $56.16 | | Business + Wholesale | Fiber | $99.98 | $98.40 | [Non-GAAP Financial Measures & Reconciliations](index=3&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) Frontier uses non-GAAP measures like Adjusted EBITDA, operating free cash flow, and net leverage ratio to evaluate performance, with Q1 2025 Adjusted EBITDA at $583 million, and provides detailed reconciliations - Management uses non-GAAP measures like EBITDA, Adjusted EBITDA, operating free cash flow, and net leverage ratio to analyze underlying financial performance, make strategic decisions, and assess cash flow generation ability[17](index=17&type=chunk) [Reconciliation of Net Income to Adjusted EBITDA](index=12&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20EBITDA) The company reconciled its Q1 2025 GAAP net loss of $64 million to a non-GAAP Adjusted EBITDA of $583 million, with key adjustments including depreciation, interest expense, and restructuring costs Adjusted EBITDA Reconciliation (YoY Comparison) | ($ in millions) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income (loss) | $(64) | $1 | | Depreciation and amortization | 445 | 388 | | Interest expense | 200 | 199 | | Restructuring costs and other charges | 36 | 34 | | Stock-based compensation | 15 | 26 | | **Adjusted EBITDA** | **$583** | **$547** | [Reconciliation of Operating Free Cash Flow](index=12&type=section&id=Reconciliation%20of%20Operating%20Free%20Cash%20Flow) Operating free cash flow for Q1 2025 was a negative $254 million, derived from net cash from operations less capital expenditures and vendor financing, an improvement from prior year Operating Free Cash Flow Reconciliation (YoY Comparison) | ($ in millions) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided from operating activities | $519 | $335 | | Capital expenditures | $(757) | $(666) | | Payment of vendor financing | $(16) | $(363) | | **Operating free cash flow** | **$(254)** | **$(694)** | [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) This press release contains forward-looking statements concerning future events, including the pending merger with Verizon, financial performance, and strategic initiatives, subject to numerous risks and uncertainties - The report includes forward-looking statements regarding future performance, strategic plans, and the proposed merger with Verizon[26](index=26&type=chunk) - A wide range of factors could affect future results, including risks related to the merger's completion, regulatory approvals, economic conditions, competition, and the company's ability to execute its fiber buildout plan[26](index=26&type=chunk)

Core Insights - Frontier Communications reported revenue of $1.51 billion for the quarter ended December 2024, reflecting a year-over-year increase of 5.6% [1] - The company's EPS was -$0.47, a decline from $0.07 in the same quarter last year, indicating a significant EPS surprise of -147.37% compared to the consensus estimate of -$0.19 [1] Financial Performance - Revenue exceeded the Zacks Consensus Estimate of $1.47 billion by 2.52% [1] - Revenue from contracts with customers was $1.49 billion, surpassing the average estimate of $1.46 billion, with a year-over-year change of +5.8% [4] - Revenue from video services was $79 million, down 18.6% compared to the previous year [4] Customer Metrics - Broadband customers totaled 3.09 million, slightly below the estimated 3.11 million [4] - Fiber revenue from consumer services was $557 million, aligning closely with the estimate of $557.64 million, representing a year-over-year increase of 15.1% [4] - Broadband net adds for business and wholesale fiber were 5 thousand, exceeding the average estimate of 4.6 thousand [4] Market Performance - Shares of Frontier Communications returned -0.1% over the past month, while the Zacks S&P 500 composite increased by 2.6% [3] - The stock currently holds a Zacks Rank 2 (Buy), suggesting potential outperformance in the near term [3]

Financial Performance - Frontier Communications reported a quarterly loss of $0.47 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.19, marking an earnings surprise of -147.37% [1] - The company posted revenues of $1.51 billion for the quarter ended December 2024, exceeding the Zacks Consensus Estimate by 2.52% and showing an increase from $1.43 billion year-over-year [2] - Over the last four quarters, Frontier Communications has surpassed consensus revenue estimates four times, but has only exceeded EPS estimates once [2] Stock Performance and Outlook - Frontier Communications shares have increased by approximately 2.9% since the beginning of the year, compared to the S&P 500's gain of 4.5% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to those expectations [4] - The current consensus EPS estimate for the upcoming quarter is -$0.27 on revenues of $1.49 billion, and for the current fiscal year, it is -$1.11 on revenues of $5.98 billion [7] Industry Context - The Communication - Network Software industry, to which Frontier Communications belongs, is currently ranked in the top 16% of over 250 Zacks industries, indicating a favorable outlook for the sector [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5] - The favorable estimate revisions trend ahead of the earnings release has resulted in a Zacks Rank 2 (Buy) for Frontier Communications, suggesting that the shares are expected to outperform the market in the near future [6]

Revenue Growth and Customer Metrics - Frontier Communications reported a revenue growth of 3% year-over-year, with fiber revenue increasing by 14% to $3.402 billion, while copper revenue declined by 8% to $2.471 billion[220]. - The company achieved fiber broadband customer growth of 19%, adding 385,000 net fiber broadband customers, resulting in a total of approximately 2.249 million consumer fiber broadband customers[204]. - The total number of broadband customers increased by 2% to 3.193 million, driven by net additions of fiber broadband customers[215]. - Consumer revenue increased by 2% to $3,163 million, driven by growth in fiber data and value-added services, despite declines in voice and video services[227]. - Business and wholesale revenue rose by 5% to $2,710 million, primarily due to increases in fiber broadband and network access services[225]. Financial Performance - Total revenue for the year ended December 31, 2024, was $5,937 million, a 3% increase from $5,751 million in 2023[223]. - Operating income decreased to $353 million for the year ended December 31, 2024, down from $492 million in 2023, primarily due to declines in voice and video services revenue[205]. - Total operating expenses increased by 6% to $5,584 million, with significant increases in depreciation and amortization expenses by 15%[240]. - Interest expense rose by $151 million, or 23%, to $804 million, driven by a higher debt balance[253]. - Cash flows from operating activities increased by $277 million to $1,621 million for the year ended December 31, 2024, primarily due to changes in working capital[262]. Merger and Acquisition - The company entered into a Merger Agreement with Verizon, with Verizon set to acquire Frontier for $38.50 per share, representing a 43.7% premium[202]. - The company expects to close the merger with Verizon by the first quarter of 2026, pending regulatory approvals[202]. Cost Savings and Efficiency - Frontier achieved $597 million in gross annualized cost savings since 2021, exceeding its initial target of $250 million[204]. - The company anticipates that its operating cash flows and existing cash balances will be sufficient to meet its working capital and capital expenditure needs over the next twelve months[271]. Capital Expenditures and Investments - Cash flows used by investing activities decreased to $1,681 million in 2024 from $2,556 million in 2023, attributed to a $428 million reduction in capital expenditures[265]. - Capital expenditures for 2024 were $2,783 million, down from $3,211 million in 2023, with a shift in capital payments classified as financing activities[266]. Debt and Liquidity - As of December 31, 2024, the company had liquidity of approximately $2,910 million, including cash and cash equivalents of $750 million[255]. - The company has total long-term debt obligations of $11,569 million, with interest obligations of $3,748 million, and total future contractual obligations amounting to $15,987 million[291]. - The company has $1,500 million in DDTL Facility and $925 million in Revolving Facility available for liquidity, with $265 million reserved for letters of credit[269]. Pension and Benefit Obligations - The unfunded benefit obligation for the company's pension and other postretirement benefit plans was $630 million as of December 31, 2024, with cash contributions of $171 million made during the year[309]. - The company’s expected long-term rate of return on pension plan assets was adjusted to 6.65% for the period from October 1, 2024, to December 31, 2024, down from 7.50%[312]. - The company’s actual return on pension plan assets for the year ended December 31, 2024, was a gain of 5%[312]. Regulatory and Compliance - As of December 31, 2024, the company was in compliance with all covenants under existing indentures and the Amended and Restated Credit Agreement[287]. - The financial maintenance covenant leverage ratio is set to not exceed 5.25:1.00 starting June 30, 2024, with a step-down to 4.75:1.00 beginning March 31, 2027[280]. Market and Risk Management - The company does not hold or issue derivative instruments for trading purposes, indicating a conservative approach to market risk management[318]. - The company has no significant equity security investments outside of its pension plan assets, limiting its exposure to equity price risk[324]. - The company aims to limit the impact of interest rate changes on earnings and cash flows while lowering overall borrowing costs[320].

Revenue Growth - Frontier achieved full-year organic revenue growth for the first time in over 15 years, driven by a 19.2% increase in fiber customers and a 13.5% increase in fiber revenues[3]. - The company reported total revenue of $5.94 billion for the full year 2024, with operating income of $353 million and Adjusted EBITDA of $2.25 billion[7]. - For the fourth quarter of 2024, revenue was $1.51 billion, a 5.6% increase year-over-year, with Adjusted EBITDA of $595 million, up 8.4% year-over-year[11]. - Revenue for Q4 2024 was $1,506 million, up from $1,426 million in Q4 2023, representing a 5.6% increase[31]. - Total revenue for the year ended December 31, 2024, was $5,937 million, compared to $5,751 million in 2023, reflecting a 3.2% growth[33]. Customer Growth - In 2024, Frontier added a record 385,000 fiber broadband customers, resulting in a year-over-year growth of 19.2%[7]. - The company added 97,000 fiber broadband customers in Q4 2024, resulting in a customer growth of 19.8% year-over-year[11]. - Broadband customers increased to 3,094 thousand, up from 2,943 thousand year-over-year, representing a growth of 5.1%[37]. - Net customer additions for broadband were 37 thousand in Q4 2024, compared to 30 thousand in Q4 2023, reflecting a 23.3% increase[37]. - The number of broadband customers at the end of December 2024 was 2,861 thousand, up from 2,700 thousand a year earlier, indicating a 5.9% increase[49]. Financial Performance - The company generated net cash from operations of $1.62 billion for the full year 2024[11]. - Net cash provided from operating activities for the year was $1,621 million, an increase from $1,344 million in the previous year, representing a growth of 20.6%[43]. - Operating free cash flow for the year ended December 31, 2024, was $(1,625) million, an improvement from $(1,871) million in 2023[45]. - The company reported a net loss of $118 million for Q4 2024, compared to a net income of $17 million in Q4 2023[41]. - For the three months ended December 31, 2024, the net loss was $118 million compared to a net loss of $82 million for the previous quarter[45]. Capital Expenditures and Investments - Frontier's total capital investment for 2024 was $3.25 billion, including cash capital expenditures of $2.78 billion[7]. - Capital expenditures for Q4 2024 were $792 million, an increase from $329 million in Q4 2023[31]. - Capital expenditures for the year were $2,783 million, down from $3,211 million year-over-year, a reduction of 13.3%[43]. Debt and Liquidity - As of December 31, 2024, Frontier had total liquidity of $2.9 billion, with a net leverage ratio of approximately 4.8x[12]. - Long-term debt increased to $11,551 million from $11,246 million year-over-year, reflecting a rise of 2.7%[39]. - The net leverage ratio stood at 4.8x as of December 31, 2024, indicating a stable leverage position[39]. Future Prospects - Frontier is in the process of being acquired by Verizon, with the transaction expected to close by the first quarter of 2026[13][14]. - The company is pursuing a proposed merger with Verizon, which may impact future operational and financial performance[29]. Operational Metrics - Consumer fiber broadband ARPU increased to $65.54, reflecting a 3.4% year-over-year growth[7]. - Average monthly consumer revenue per customer rose to $83.58, up from $82.54 year-over-year, indicating a growth of 1.26%[37]. - Customer monthly churn improved to 1.68% from 1.43% year-over-year, showing a decrease of 0.25 percentage points[37]. - The estimated total fiber penetration rate as of December 31, 2024, was 30.6%, compared to 30.2% in the previous quarter[49]. - The EBITDA margin for the quarter ended December 31, 2024, was 34.2%, slightly up from 33.3% in the previous quarter[45].

Core Viewpoint - Frontier Communications (FYBR) is expected to report a quarterly loss of $0.19 per share, a significant decline of 371.4% year-over-year, while revenues are projected to increase by 3% to $1.47 billion [1]. Financial Projections - The consensus EPS estimate has remained unchanged over the past 30 days, indicating analysts have not revised their projections [2]. - Analysts predict 'Revenue- Revenue from contracts with customers' to reach $1.46 billion, reflecting a year-over-year increase of 3.3% [5]. - 'Revenue- Subsidy and other revenue' is estimated at $15.33 million, indicating a decline of 9.8% year-over-year [5]. - 'Revenue- Video services' is projected to be $78.16 million, showing a decrease of 19.4% year-over-year [5]. Customer Metrics - 'Revenue- Fiber- Consumer' is expected to reach $557.64 million, a year-over-year increase of 15.2% [6]. - The estimate for 'Broadband Customers - Consumer - Copper' is 619.62 thousand, down from 822 thousand a year ago [6]. - Total 'Broadband Customers - Consumer' is projected at 2.88 million, compared to 2.7 million the previous year [6]. Average Revenue Per User (ARPU) - 'Broadband ARPU - Consumer - Fiber' is expected to be $66.12, up from $64.16 in the same quarter last year [7]. - 'Broadband ARPU - Consumer - Copper' is projected at $58.02, compared to $54.22 a year ago [7]. - 'Broadband ARPU - Consumer - Total' is estimated at $64.34, an increase from $61.02 in the previous year [8]. - 'Broadband ARPU - Business - Fiber' is expected to reach $100.22, up from $98.86 year-over-year [8]. - 'Broadband ARPU - Business - Copper' is projected at $62.42, compared to $59.87 a year ago [8]. - The average prediction for 'Broadband ARPU - Business - Total' is $85.33, compared to $80.17 the previous year [9]. Market Performance - Shares of Frontier Communications have returned +0.3% over the past month, while the Zacks S&P 500 composite has increased by +4.7% [9]. - With a Zacks Rank 2 (Buy), FYBR is anticipated to outperform the overall market in the near future [10].

Core Insights - Frontier Communications reported $1.49 billion in revenue for Q3 2024, a year-over-year increase of 3.7% [1] - The company experienced an EPS of -$0.33, compared to $0.05 a year ago, indicating a significant decline [1] - Revenue exceeded the Zacks Consensus Estimate of $1.45 billion, resulting in a surprise of +2.35% [1] - The EPS surprise was -50.00%, with the consensus EPS estimate being -$0.22 [1] Revenue and Customer Metrics - Broadband customers totaled 3.06 million, slightly above the estimated 3.04 million [3] - Broadband Net Adds for Business - Fiber were 4 thousand, below the average estimate of 4.39 thousand [3] - Consumer Broadband Customers - Fiber reached 2.16 million, exceeding the estimate of 2.14 million [3] - Business Broadband Customers - Fiber were 138 thousand, close to the estimate of 138.39 thousand [3] Revenue Breakdown - Revenue from contracts with customers was $1.47 billion, surpassing the estimate of $1.44 billion, reflecting a +3.5% year-over-year change [3] - Subsidy and other revenue amounted to $18 million, exceeding the estimate of $14.67 million, with a year-over-year change of +20% [3] - Video services revenue was $83 million, slightly below the estimate of $83.85 million, showing a -20.2% change year-over-year [3] - Fiber-Consumer revenue was $537 million, close to the estimate of $539.12 million, with a +12.1% year-over-year change [3] - Other revenue was $83 million, slightly below the estimate of $83.41 million, reflecting a +2.5% year-over-year change [3] - Revenue from contracts with customers - Fiber was $867 million, exceeding the estimate of $821.31 million, representing a +14.1% year-over-year change [3] - Revenue from contracts with customers - Copper was $604 million, slightly above the estimate of $601.60 million, with a year-over-year change of -8.6% [3] - Fiber - Business and Wholesale revenue reached $330 million, surpassing the estimate of $282.19 million, indicating a +17.4% year-over-year change [3] Stock Performance - Shares of Frontier Communications returned +0.3% over the past month, compared to the Zacks S&P 500 composite's -0.5% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Group 1 - Frontier Communications reported a quarterly loss of $0.33 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.22, and compared to earnings of $0.05 per share a year ago, indicating an earnings surprise of -50% [1] - The company posted revenues of $1.49 billion for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 2.35%, and this represents an increase from year-ago revenues of $1.44 billion [2] - Frontier Communications shares have increased approximately 39.7% since the beginning of the year, outperforming the S&P 500's gain of 19.8% [3] Group 2 - The earnings outlook for Frontier Communications is mixed, with the current consensus EPS estimate for the coming quarter at -$0.12 on revenues of $1.45 billion, and -$0.79 on revenues of $5.85 billion for the current fiscal year [7] - The Zacks Industry Rank indicates that the Communication - Network Software sector is currently in the bottom 35% of over 250 Zacks industries, suggesting potential challenges for stock performance [8] - Frontier Communications has achieved consensus revenue estimates three times over the last four quarters, indicating some level of operational consistency [2]

Financial Performance - Revenue of $1.49 billion, an increase of 3.7% year-over-year, driven by fiber-based product growth[2] - Adjusted EBITDA of $549 million, up 4.4% year-over-year, despite higher customer acquisition costs[2] - Operating income for the three months ended September 30, 2024, was $86 million, down from $114 million in the same period last year, representing a 24.6% decrease[24] - Net loss for the three months ended September 30, 2024, was $(82) million, compared to a net income of $11 million in the same period last year[24] - For the nine months ended September 30, 2024, total revenue was $4,431 million, a 2.5% increase from $4,325 million in the same period last year[25] - Basic net loss per common share for the three months ended September 30, 2024, was $(0.33), compared to earnings of $0.05 in the same period last year[24] - Interest expense for the three months ended September 30, 2024, was $(203) million, an increase from $(170) million in the same period last year[24] - The company reported a net loss of $(204) million for the nine months ended September 30, 2024, compared to a net income of $12 million for the same period last year[40] Customer Growth and Metrics - Fiber broadband customer growth of 19.3% year-over-year with 108,000 new customers added[2] - Broadband customers reached 3,057 thousand as of September 30, 2024, up from 2,913 thousand a year ago, representing a year-over-year increase of 4.9%[32] - Net customer additions for broadband were 47 thousand in Q3 2024, compared to 15 thousand in Q3 2023, showing a significant improvement[32] - Fiber broadband customers increased to 2,157 thousand, compared to 2,053 thousand in the previous quarter, reflecting a growth of 5.1%[42] - The total number of broadband customers reached 2,823 thousand, compared to 2,774 thousand in the previous quarter, indicating a growth of 1.8%[42] Revenue Breakdown - Consumer fiber broadband revenue increased by 21.8% year-over-year to $414 million[3] - Business and Wholesale revenue rose by 7.6% year-over-year to $682 million[4] - Revenue from Data and Internet services for the three months ended September 30, 2024, was $1,004 million, a 12.2% increase from $895 million in the same period last year[27] - Revenue from Fiber services for the three months ended September 30, 2024, was $867 million, up from $760 million in the same period last year, indicating a 14.1% growth[29] - Total broadband revenue for the company reached $595 million for the quarter ended September 30, 2024, up from $583 million in the previous quarter[42] Capital Expenditures and Cash Flow - Total cash capital expenditures amounted to $699 million[2] - Capital expenditures for the three months ended September 30, 2024, were $699 million, an increase from $671 million in the same period last year[24] - Net cash provided from operating activities was $618 million for Q3 2024, compared to $383 million in Q3 2023, marking a 61.5% increase[37] - Net cash provided from operating activities was $1,327 million, an increase from $1,048 million year-over-year[39] - Net cash used by investing activities was $691 million in Q3 2024, a decrease from $1,419 million in Q3 2023, indicating improved cash management[37] Debt and Liquidity - Frontier had total liquidity of $2.0 billion, including a cash balance of approximately $1.3 billion[7] - Long-term debt stood at $11,556 million as of September 30, 2024, compared to $11,246 million at the end of 2023, indicating an increase of 2.8%[34] - The net leverage ratio was reported at 4.6x, calculated using adjusted EBITDA of $2,205 million over net debt of $10,246 million[35] - Cash, cash equivalents, and restricted cash at the end of the period totaled $1,480 million, up from $1,054 million a year ago, representing a 40.4% increase[38] Acquisition and Future Outlook - Verizon is set to acquire Frontier at $38.50 per share, with the transaction expected to close by Q1 2026[8][9] Operational Metrics - Total operating expenses for the three months ended September 30, 2024, were $1,403 million, up from $1,322 million in the same period last year, reflecting a 6.1% increase[24] - Average monthly consumer revenue per customer decreased slightly to $83.12 from $83.99 in Q3 2023, reflecting a 1.0% decline[32] - Customer monthly churn increased to 1.80% in Q3 2024 from 1.70% in Q3 2023, indicating a rise in customer turnover[32] - Total fiber penetration stood at 30.2% as of September 30, 2024, slightly down from 30.4% in the previous quarter[42] - Estimated broadband fiber penetration increased to 45.7% from 45.3% in the previous quarter[42]