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

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

Question: Ben Swinburne - Morgan Stanley - Analyst : 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?

Question: Ben Swinburne - Morgan Stanley - Analyst : Last year was, I think, stronger than expected year for wireless growth for Verizon and I think the broader industry, we were just talking with John before about the industry's ability to continue to grow lines. How do you guys think about industry growth and what gives you confidence it can continue to grow fast enough that you can deliver on your expectations?

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?

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 confidence you guys can improve

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 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. 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 : 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? 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 : 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 -- 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 : 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. 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 : 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? 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