Verizon posted better-than-expected Q4 2024 results. While revenue rose 1.6% year-over-year to $35.7 billion, earnings came in at $1.10 per share on an adjusted basis. Growth was driven by price hikes as well as higher phone subscriber additions. Verizon added 568,000 wireless postpaid phone business and consumer subscribers over the quarter.
Verizon has been building out its 5G network for some time now, focusing on deploying the mid-band C-band spectrum, which can offer average download speeds of 300Mbps. The carrier spent over $50 billion to acquire the C-band spectrum, which offers a good balance between speed and coverage. Verizon previously indicated that it aimed to cover about 250 million people with its Ultra Wideband spectrum, which includes its 3.7 GHz C-band spectrum, by the end of 2024.
Verizon makes money primarily through mobile phone subscription plans for consumers and businesses. The company also provides landline phone service to residences, small businesses, and large enterprises. 5G wireless, wireline broadband Internet, and fiber optic TV services (FiOS) are growth areas for Verizon.
Below are key drivers of Verizon's value that present opportunities for upside or downside to the current Trefis price estimate for Verizon.
Consumer
For additional details, select a driver above or a division from the interactive Trefis split for Verizon at the top of the page.
The Consumer segment constitutes the majority of Verizon's value due to:
Verizon's consumer business accounted for about 78% of the company's revenue in 2024. Gross Margins for the segment are also thicker, standing at about 60% compared to under 50% for the Business segment due to its higher exposure to more lucrative wireless revenues. The growth potential for the segment is also higher.
While Verizon was seen as having the strongest 4G network in the U.S., the company trails T-Mobile, which is perceived to have the strongest 5G network in terms of reach and upload and download speeds due to its rich mid-band spectrum holding, which is considered as the sweet-spot for 5G deployments. However, during the FCC C-Band auction held in 2021, Verizon spent $52.9 billion, including incentive payments and clearing costs, to add an average of 161 MHz nationwide spectrum. This move effectively doubled Verizon's mid-band spectrum holdings. The company rolled out this spectrum to over 220 million people as of late 2023 and had a target of reaching over 250 million by 2024.
Mobile phone voice plan pricing has gradually declined as competition has intensified and technology (primarily speed and reliability) and reach have improved. Increasingly, data access is a significant part of usage. So, while average voice revenues have been downward, the increased data revenue contribution has helped mitigate the impact on total ARPU. Verizon has also been letting go of its feature phone subscribers while focusing on retaining higher-value smartphone users.
Verizon has been stepping back from the declining landline market to focus on the more lucrative wireless business, which is growing faster and is less heavily regulated. The wireless business is also not unionized, unlike the wireline business.
