Verizon reaches $10 billion savings target set in 2018
Verizon has achieved a target it set in 2018 to generate US$10 billion in cumulative cash savings by the end of 2021.
Confirming in its Q1 financials that it reached the target ahead of time, Verizon posted a 4% increase year on year in operating revenue, reaching $32.9 billion in Q1.
The figures are even more impressive given the telco saw its unsecured debt increase by $42.9 billion to $147.6 billion in the quarter, while and the company’s net unsecured debt (non-GAAP) increased by $39.7 billion on 2020 figures to reach $137.4 billion.
With the FCC holding spectrum auctions, Q1 was an expensive one. Verizon made payments of approximately $45 billion to the FCC for spectrum won at the country's C-Band auction.
To finance this purchase, the company raised $12 billion in fourth-quarter 2020, and more than $31 billion in March 2021. Staying true to its ESG and diversity goals, as part of its $25 billion US financing, Verizon worked with nine firms that are either minority-owned, women-owned, or veteran or disabled veteran-owned.
“Verizon is off to an excellent start in 2021 as we met the challenge of intense competition in the first quarter by achieving revenue growth across our three business segments," said chairman and CEO Hans Vestberg (pictured).
“This year began with a transformative milestone for our company with our success in the recent C-Band spectrum auction. We continue to strengthen our networks, execute on our Network-as-a-Service strategy and focus on the five vectors that underpin our growth framework and position us to deliver success in 2021 and beyond,” Vestberg added.
Capital expenditures for the quarter totalled $4.5 billion, including approximately $40 million of C-Band related items. Verizon said capital expenditures "continue to support the growth in traffic on the company's 4G LTE network and the continued expansion of the company's 5G Ultra Wideband and nationwide networks".
Cash flow from operations totalled $9.7 billion in the quarter, an increase of approximately $900 million year over year driven by the company's continued operational discipline and net benefits from its liability management activities which lowered borrowing rates from last year.
In the consumer segment, total revenue increased 4.7% year on year to reach $22.8 billion. There were 326,000 retail postpaid net losses, including 225,000 phone net losses with total retail postpaid churn of 0.97%, and retail postpaid phone churn of 0.77%.
Revenue from business customers increased 1.3% to total $7.8 billion with retail postpaid churn of 1.24%, and retail postpaid phone churn of 1.01%.
In wireless, total service revenue reached $16.7 billion, a 2.4% increase year over year.
“The strength in our core business is driving higher revenues and strong demand for our products and services,” said Verizon Chief Financial Officer Matt Ellis. “We delivered strong operational and financial performance, giving us positive momentum as we end the first quarter. High quality, sustainable wireless service revenue growth, a recovery in wireless equipment revenues, strong Fios momentum and excellent Verizon Media trends led the way."