Verizon(US:VZ)2025-10-29 17:10Financial Performance - Verizon's Consumer segment reported operating revenues of $26.1 billion for Q3 2025, a 2.9% increase from $25.4 billion in Q3 2024, and $78.4 billion for the first nine months of 2025, up 4.0% from $75.3 billion in the same period of 2024[171]. - The Business segment's operating revenues decreased to $7.1 billion in Q3 2025, down 2.8% from $7.4 billion in Q3 2024, and $21.7 billion for the first nine months of 2025, a decline of 1.5% from $22.0 billion in the same period of 2024[173]. - Consolidated operating revenues for Q3 2025 reached $33.8 billion, a 1.5% increase from $33.3 billion in Q3 2024, and $101.8 billion for the first nine months of 2025, up 2.7% from $99.1 billion in the same period of 2024[185]. - Consolidated Net Income for the three months ended September 30, 2025, was $5.056 billion, an increase of 48.3% compared to $3.411 billion in 2024[207]. - Consolidated EBITDA for the nine months ended September 30, 2025, was $38.374 billion, up 10.5% from $34.802 billion in 2024[207]. - Total operating revenues for the three months ended September 30, 2025, were $26,105 million, an increase of 2.9% compared to $25,360 million in the same period of 2024[237]. - Total operating revenues for the nine months ended September 30, 2025, were $78,371 million, an increase of 4.0% from $75,344 million in the same period of 2024[237]. Expenses and Costs - The cost of services decreased by 4.6% to $6.9 billion in Q3 2025 compared to $7.2 billion in Q3 2024, and for the first nine months, it decreased by 1.8% to $20.7 billion from $21.1 billion[186]. - Cost of wireless equipment increased by 7.2% to $6.5 billion in Q3 2025, driven by a shift to higher-priced equipment, and for the first nine months, it rose by 11.9% to $19.6 billion from $17.5 billion[186]. - Total operating expenses increased by $685 million (3.9%) and $2.876 billion (5.5%) for the three and nine months ended September 30, 2025, respectively[243]. - Total Operating Expenses decreased by $281 million (4.1%) and $799 million (3.9%) for the three and nine months ended September 30, 2025, respectively[261]. Capital Expenditures and Investments - Capital expenditures for the nine months ended September 30, 2025, totaled $12.3 billion, with expectations for total capital expenditures in 2025 to be between $17.5 billion and $18.5 billion[176]. - Capital expenditures for the nine months ended September 30, 2025, were $12.3 billion, an increase of $244 million compared to $12.0 billion in the same period of 2024, primarily due to Fios footprint expansion and C-Band spectrum deployment[284]. - Verizon's strategy includes significant capital investments in wireless spectrum and advanced information technology systems to drive future growth[156]. Tax and Income - The One Big Beautiful Bill Act (OBBBA) is expected to decrease Verizon's 2025 cash income tax liability by $2.0 billion to $2.3 billion by December 31, 2025[180]. - Provision for Income Taxes increased by 65.1% to $1.471 billion for the three months ended September 30, 2025, compared to $891 million in 2024[200]. - Effective income tax rate increased to 22.5% for the three months ended September 30, 2025, compared to 20.7% in 2024[200]. Wireless and Broadband Services - Wireless retail connections increased due to a higher volume of wireless devices sold, with a notable 13% increase in upgrades[196]. - Wireless service revenue for the same period was $17,441 million, reflecting a 2.4% increase from $17,036 million year-over-year[237]. - Total broadband connections increased by 831, reaching 10,593, representing an 8.5% growth compared to the previous year[237]. - FWA broadband connections saw a significant increase of 700, totaling 3,198, which is a 28.0% rise year-over-year[237]. - Wireless retail postpaid accounts decreased by 366, totaling 32,353, marking a decline of 1.1%[237]. - Wireless retail postpaid ARPA increased to $147.91, up 2.0% from $144.94 in the previous year[237]. - The churn rate for wireless retail was stable at 1.61% for both the current and previous periods[237]. - Fios internet connections increased by 175, totaling 7,263, which is a 2.5% growth year-over-year[237]. - Wireless retail core prepaid connections increased by 282, reaching 19,062, a growth of 1.5% compared to the previous year[237]. Mergers and Acquisitions - Verizon entered into a merger agreement to acquire Frontier Communications for $38.50 per share in cash, with shareholder approval received in November 2024[316]. - The merger is subject to remaining regulatory approvals and customary closing conditions, with potential termination fees of $320 million for Frontier and $590 million for Verizon under specified circumstances[316]. - In October 2025, Verizon announced plans to acquire Starry Group Holdings, a fixed wireless broadband provider, pending FCC approval[317]. - The merger with Frontier is expected to provide cost savings and synergies, although risks remain regarding the successful completion of the transaction[324]. Cash Flow and Financing - Cash Flows Provided By Operating Activities increased by $1.5 billion during the nine months ended September 30, 2025, compared to the similar period in 2024[282]. - The company’s cash and cash equivalents increased by $3.5 billion during the nine months ended September 30, 2025, compared to $1.9 billion in the same period in 2024[279]. - Net cash used in financing activities for the nine months ended September 30, 2025, was $12.8 billion, compared to $11.5 billion in 2024, driven by cash dividends of $8.6 billion and repayments of long-term borrowings totaling $7.5 billion[286][287]. - Free cash flow for the nine months ended September 30, 2025, was $15.76 billion, up from $14.46 billion in 2024, reflecting an increase in operating cash flows[301]. - Cash and cash equivalents increased by $3.5 billion to $7.7 billion as of September 30, 2025, compared to December 31, 2024[298]. Regulatory and Compliance - The company continues to monitor the impacts of U.S. government tariffs and changes in federal workforce initiatives on its business operations[181][182]. - Verizon is involved in various litigation and regulatory proceedings but does not anticipate any material legal proceedings requiring disclosure[325]. - The company faces risks including competition, technology developments, and economic conditions that could materially affect future results[319]. - The company is focused on addressing changes in consumer demand and technological advancements, including artificial intelligence[319]. Operational Efficiency - The company recorded pre-tax amortization expense of $189 million and $571 million related to acquired intangible assets for the three and nine months ended September 30, 2025, respectively[272]. - The company recorded charges of $52 million related to transaction and integration expenses associated with the pending acquisition of Frontier during both the three and nine months ended September 30, 2025[273]. - The company is implementing a new global ERP system to enhance financial information flow and data analysis, expected to continue over the next few years[321]. - As of September 30, 2025, the effectiveness of the company's disclosure controls and procedures was confirmed by the CEO and CFO[320]. - The company has not experienced any material changes in internal control over financial reporting during the third quarter of 2025[323].