Verizon Communications Inc at Morgan Stanley Technology, Media & Telecom Conference Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Ben Swinburne - Morgan Stanley - Analyst : <_ALACRA_META_ABSTRACT>All right. We're good. So I've got a lot to cover and talk about your guidance for the year and the broader wireless industry. Maybe just to start out, what would be the major priorities for Verizon as you look at 2025? Anthony Skiadas - Verizon Communications Inc - Chief Financial Officer, Executive Vice President Sure. So the team is at a macro level, very aligned on growing wireless service revenue, adjusted EBITDA and free cash flow. And let me break that down for you. You heard us talk about two enginesof growth between mobility and broadband. And if I start with mobility and look at the consumer business, a lot of progress has been made by Sampath and the team to continue to improve consumer volumes year over year. And on the business side, Kyle and the team continue to have consistent growth, and that's quarter after quarter of mobility growth. And then from a broadband perspective, we're very pleased with the progress we're making on broadband and we see great momentum in both Fios and fixed wireless access. We have over 12.3 million broadband subscribers in our base. So very good momentum there. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 04, 2025 / 4:30PM, VZ.N - Verizon Communications Inc at Morgan Stanley Technology, Media & Telecom Conference And then when you break it down from an operational perspective, it's all about growing revenue and the constructs we have around myPlan and myHome and the value proposition we have with Perks. And then from a cost perspective continue to make the business more efficient with a number of cost transformation programs. And then on the network side, Joe and the team continue to deploy C-Band, and that's a priority for us to get to 80% to 90% of planned sites on C-Band. And then we're also excited about our broadband expansion plans. We talked about that back in October in terms of going further with Fios and our plans with FWA as well. And then we have Frontier coming into the fold soon. So we're excited about those plans. And then from my perspective, in terms of my focus areas, number one, it continues to be supporting the leaders in the business and making sure we have strong operational performance and execution. It's so critically important in our business day in and day out. And then our second priority is delivering on our financial guidance and we're on track with our guidance and making sure that we position the company for growth opportunities ahead. And then the third is really generating strong cash flow and delivering on our capital allocation framework. And those capital allocation priorities remain unchanged. So we delivered on what we said in 2024. We delivered on all our commitments and we're positioning ourselves for good success in 2025.

Question: Ben Swinburne - Morgan Stanley - Analyst : Obviously, underneath all this we have the handset environment. There's a lot of focus on the new iPhones that have come out and the fact that we really haven't seen a cycle. What are you guys seeing in the business from an upgrade perspective? I think you guided to some growth in '25. We've had a cheaper version of the 16 come out. So what's driving the upgrade or lack thereof behavior in the base? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 04, 2025 / 4:30PM, VZ.N - Verizon Communications Inc at Morgan Stanley Technology, Media & Telecom Conference

Question: Ben Swinburne - Morgan Stanley - Analyst : Not seeing a super cycle right now.

Question: Ben Swinburne - Morgan Stanley - Analyst : Okay. One of the things that got a lot of attention around the Super Bowl was the directed device opportunity in the marketplace. What's Verizon's perspective on direct-to-device and satellite connectivity? Is it a big revenue opportunity? How do you guys think about it?

Question: Ben Swinburne - Morgan Stanley - Analyst : So it sounds like it's maybe more incremental than trends.

Question: Ben Swinburne - Morgan Stanley - Analyst : Okay. Wireless service revenue growth. So guidance for 2% to 2.8% in '25. Can you talk a little bit about the tailwinds and headwinds that build to that growth rate for this year?

Question: Ben Swinburne - Morgan Stanley - Analyst : So in that expectation, if I look at consensus, Tony, I think the Street's got -- postpaid phone nets up almost 300,000 in '25. I know you guys have guided to improvement. What are the things that Sampath and the team are doing that's working that gives you

Question: Ben Swinburne - Morgan Stanley - Analyst : Obviously, you operate in a competitive environment, right, things out of your control. /One of the big topics over the last couple of months has been whether the cable operators are going to get more aggressive with their converged offers, particularly Comcast. Can you still deliver on your guidance if you think about where that might go from a competitive pressure perspective?

Question: Ben Swinburne - Morgan Stanley - Analyst : You were mentioning earlier that part of the strength in the industry has been prepaid to postpaid migration. But I did want to ask you about your prepaid business. You guys grew last year exclude SafeLink for the first time since you bought TracFone. What are REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 04, 2025 / 4:30PM, VZ.N - Verizon Communications Inc at Morgan Stanley Technology, Media & Telecom Conference you guys doing to make that business perform better? Maybe take a little bit of a deeper dive into the broader value segment in Verizon.

Question: Ben Swinburne - Morgan Stanley - Analyst : Got it. Let's keep moving down the P&L. So we talked about revenue growth and the drivers and factors there. On the EBITDA front, so you've guided to 2% to 3.5% year-on-year growth. Maybe starting with consumer, what are the factors that allow you guys to drive that growth? What are the things we should be thinking about as we move through the year?

Question: Ben Swinburne - Morgan Stanley - Analyst : Can we see business EBITDA declines improve in '25 relative to last year, you think?

Question: Ben Swinburne - Morgan Stanley - Analyst : Great. Let's move to free cash flow then. So you gave us a target of $17.5 billion to $18.5 billion for '25. We've talked about the revenue growth algorithm. We talked about some of the cost pieces. What are the things we should be thinking about around free cash flow puts and takes for this year to deliver the guide?

Question: Ben Swinburne - Morgan Stanley - Analyst : If we get bonus depreciation reinstated or whatever the right language is, and R&D credits. Any way to help us think about the benefits to Verizon's free cash flow from that?

Question: Ben Swinburne - Morgan Stanley - Analyst : Different person asking the question.

Question: Ben Swinburne - Morgan Stanley - Analyst : Okay. So I'm not going to get a number out of you --

Question: Ben Swinburne - Morgan Stanley - Analyst : Fair enough. Let's shift to broadband. So back at your investor event last fall, you talked about getting to over 100 million homes in the US between fiber and fixed wireless. Why don't we start with fiber. So it's kind of hard to believe Fios is 20 years old plus.

Question: Ben Swinburne - Morgan Stanley - Analyst : Yeah. Still growing. So what do you see -- I mean you're still building. I mean you're doing --

Question: Ben Swinburne - Morgan Stanley - Analyst : I was wondering when you think about -- I'm sure Fios today, what they're building is not what they built 20 years ago. But what are you seeing from a penetration curve and returns perspective to your Fios expansion now versus the past?

Question: Ben Swinburne - Morgan Stanley - Analyst : How do you think about going beyond the 30 million fiber locations target in '28, which obviously includes Frontier? What are the analyses you guys do to size that?

Question: Ben Swinburne - Morgan Stanley - Analyst : Any concerns about fiber overbuilding in this country and the markets you guys are in? Because we've seen some data suggesting maybe, I don't know, 10% of the US now has maybe two fiber players plus a cable, which seems like a recipe for nobody to make a good return.

Question: Ben Swinburne - Morgan Stanley - Analyst : Any update on the regulatory process for Frontier?

Question: Ben Swinburne - Morgan Stanley - Analyst : Got it. Let's talk fixed wireless. So you guys, again, back in, I think, it was October, laid out a plan to essentially double the sub-base to 8 million to 9 million subscribers, get to 90 million homes open for sale, so to speak, compared to 60 million today. How do you guys scale up the fixed wireless footprint in terms of where you're selling the product?

Question: Ben Swinburne - Morgan Stanley - Analyst : I live in New York City, and you guys cover a lot of urban areas. So this MDU thing is interesting. How do you guys think about wiring a building with Fios versus this new FWA product that you're bringing to market?

Question: Ben Swinburne - Morgan Stanley - Analyst : You guys made a little bit of news last week with the new converged offer, which got some attention in the market. I'm just curious if you could talk a little bit about convergence strategy and what we should take in terms of whether you're getting more, less or no change to your promotional posture with the new plans you laid out?

Question: Ben Swinburne - Morgan Stanley - Analyst : And any color you'd want to share on the new offer from Friday or --

Question: Ben Swinburne - Morgan Stanley - Analyst : You mentioned earlier some of the stuff that Kyle talked about on the earnings call with AI. I've certainly got some questions since the earnings about AI Connect and the opportunity you guys see. Can you just share with us how you guys are leveraging AI at Verizon in general and what the what the revenue opportunity is with customers?

Question: Ben Swinburne - Morgan Stanley - Analyst : That's helpful. So with all of that, Tony, how would you help us think about your capital allocation priorities, particularly within the context of your leverage framework?

Question: Ben Swinburne - Morgan Stanley - Analyst : Is there -- when you look at -- including the Frontier acquisition, is there a way to help us think about either the timing or the sizing of buybacks as they look out over the next couple of years?

Question: Ben Swinburne - Morgan Stanley - Analyst : Okay. Fair enough. How would you think about or how would you tell us to think about other inorganic opportunities, joint ventures, particularly as you grow your fiber footprint?

Question: Ben Swinburne - Morgan Stanley - Analyst : Got it. Anything you want to say on BEAD. It's another one of those frequent topics from investors.

Question: Ben Swinburne - Morgan Stanley - Analyst : That's great. Well, Tony, any final comments as we wrap up and you want to summarize everything for the audience?