Verizon’s 5G adoption rises as Q2 success hits record high

Verizon has reported record success in the second quarter of 2021 caused by an increase in the adoption of its 5G phone service, customer and sequential wireless service revenue growth, and network reliability. The company revised its revenue and adjusted EPS guidance upward for the full year as a result. 

Hans Vestberg, Chairman and CEO of Verizon, said: “We are executing on our multipurpose network strategy and producing positive results in each of our five growth vectors, recording strong second-quarter results. With more connections on our network than anyone else, our already excellent network performance improved in the quarter and was recognized by RootMetrics as the best overall network performance for the 16th time in a row. We are also expanding our 5G Ultra-Wideband and 5G Home markets”. 

He added that that the company “is excited about its momentum leading into the second half of the year”, and that it is “on track” to close the Tracfone and Verizon Media transactions. 

Verizon’s Q2 2021 highlights 

Consolidated:

• US$1.40 in earnings per share (EPS); adjusted EPS*, excluding special items, of US$1.37.

• Operating revenue of US$33.8bn, a result of strong sequential wireless revenue growth.

• Net income of US$5.9bn and adjusted EBITDA* of US$12.2bn.

Total Wireless:

• Total wireless service revenue of US$16.9bn, a 5.9% increase year over year, and a 4.0 percent increase from second-quarter 2019.

• Total retail postpaid churn of 0.94 percent, and retail postpaid phone churn of 0.72 percent.

• 528,000 retail postpaid net additions, including 275,000 phone net additions, resulting in 121.3mn total retail connections.

Consumer:

• Total revenue of US$23.5 bn, an increase of 11.2% year over year, and an increase of 6.7% from second-quarter 2019.

• Total retail postpaid churn of 0.83%, and retail postpaid phone churn of 0.65 percent, a record-low retail postpaid phone churn outside of second-quarter 2020 and third-quarter 2020, which were heavily impacted by the COVID-19 pandemic.

• 350,000 retail postpaid net additions, including 197,000 phone net additions, driving 5G-phone adoption to approximately 20% of Consumer wireless phone customers and step-ups to premium unlimited plans.

• 92,000 Consumer Fios Internet net additions. The company's trailing 12-month total Fios Internet net addition performance is the highest since 2015.

Business:

• Total revenue of US$7.8bn, an increase of 3.7% year over year, and relatively flat from second-quarter 2019.

• Total retail postpaid churn of 1.30%, and retail postpaid phone churn of 1.07%.

• 178,000 retail postpaid net additions, including 78,000 phone net additions.

“Second quarter results were exceptional, both financially and operationally,” said Verizon Chief Financial Officer Matt Ellis. “Our strong first-half performance and the momentum in our business gives us the confidence to raise our total wireless service revenue growth guidance to between 3.5% and 4%, an update from prior guidance for 2021 total wireless service revenue growth of at least 3%. We are also raising our adjusted EPS guidance* to the range of US$5.25 to US$5.35, an update from prior guidance for 2021 adjusted EPS* of US$5.00 to US$5.15”.

Also in Q2, Verizon came to an agreement with Apollo funds to sell Verizon Media, the expected close date being in the second half of 2021. Following this, the Verizon Media business classified certain assets as “Held for Sale”, which the company no longer depreciated or paid off. According to Verizon, this led to a partial quarter benefit of three cents per share in Q2, which will continue as a benefit until the deal is closed.