This ranking evaluates how Fortune 500 companies are deploying AI, and how technology leaders value those investments relative to industry peers.

Fortune AIQ 75

The companies on the Global 500 employ 70.2 million people, and their revenue represents more than one-third of the world’s GDP.

Fortune Global 500

With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

The 300 companies on this year’s list brought in over $12.5 trillion in revenue for the latest 12 months, with the median revenue figure at $24 billion.

America's Most Innovative Companies

AI is a major force shaping this year’s list—but it’s far from the only story.

World's Most Admired Companies

Fortune AIQ 50

The corporations on our annual list of the world's 500 largest companies combined to generate $41.7 trillion in revenue over the past year.

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

The 300 companies on this year’s list brought in over $12.6 trillion in revenue for the latest 12 months, with the median revenue figure at $22 billion.

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The corporations on our annual list posted aggregate revenues of $41 trillion for the second year in a row.

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The 200 companies on this list are transforming industries from the inside out.

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The 25th Fortune World’s Most Admired Companies list suggests that tech giants’ peers respect them as much as ever.

The corporations on our annual list of the world’s largest companies delivered a record $41 trillion in aggregate revenues.

G500-2023-Verizon

The 300 companies on this list are transforming industries from the inside out.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

F500 2023-Verizon Communications

Verizon can boast of being the U.S. cell phone carrier with the most subscribers, with about 144 million consumer and business subscribers as of year-end 2022. But revenue grew only slowly last year. 
<ul> 
 	<li>The company reported total wireless service revenue of more than $74 billion for 2022.</li> 
 	<li>In April 2023, Verizon reported broadband net additions of 437,000 in the first quarter of 2023–the largest quarterly gain in more than a decade. That helped offset a steady decline in customers for its Fios TV products, as more customers defected from traditional cable television.</li> 
</ul>

Just as it dominates our economy, Big Tech now dominates Fortune’s annual ranking of corporate reputation.

Aggregate sales hit $37.8 trillion last year—an increase of 19%, the highest annual growth rate in the list’s history.

This year’s Fortune 500 marks the 68th running of the list.

F500 2022 Verizon

In early 2021, Verizon bid more than $45 billion in an auction for airwave licenses to accommodate its transition to a higher-speed 5G network. Over the ensuing year, that investment has begun to pay off. CEO Hans Vestberg says customers are embracing 5G faster than they did 4G, with about 25% of Verizon customers using the faster networks as of early 2022. Verizon can charge a premium for those networks, and its profits were up 24% in 2021 versus 2020. (One ongoing speed bump: Rollout of 5G coverage at and near airports was restricted early in 2022 after airlines and regulators expressed concern about potential interference with airplane navigation equipment.) Verizon announced in April 2022 that it was raising its minimum wage to $20 hourly for customer service, retail, and inside sales employees.

After a year in which humanity leaned more heavily than ever on tech giants, see which companies topped Fortune's ranking of corporate reputation.

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G500-2021-045-Verizon

In his third year as CEO, Hans Vestberg continued to do what he promised Verizon’s board he would do when he interviewed for the top job in 2018: focus on 5G wireless. Spending $18 billion in 2020, Verizon doubled the number of cities with its superfast 5G technology to over 60 and added another slower layer of 5G that provided nationwide coverage (even if it was not much faster than 4G). With the speedier version of Verizon's 5G service ranked as the world’s fastest, Apple invited Vestberg on stage to help introduce iPhone 12 models that are compatible with the technology. The carrier also added a partnership with Microsoft’s Azure cloud service to offer connections over its 5G network, following an earlier deal with Amazon. In early May 2021, meanwhile, Verizon took a big step away from being a content provider, selling its media group—which includes the AOL and Yahoo brands—to private equity firm Apollo Global Management.

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-20-Verizon

For an astounding 13th straight year, Apple claims the top spot in Fortune’s annual ranking of corporate reputation, based on a survey of almost 3,800 executives, directors, and analysts.

This year's Fortune Global 500 generated $33.3 trillion in revenues and $2.1 trillion in profits.

G500-2020-044-Verizon

Revenue was steady at Verizon and profits surged 24% as new CEO Hans Vestberg pursued a strategy of building the best 5G wireless network without further diversifying into the entertainment business as rivals AT&amp;T and Comcast have done. (Its Verizon Media unit retains assets from the former AOL and Yahoo, acquired in 2015 and 2017, respectively.) Instead, Vestberg has smartly partnered with others, including Disney, to supply popular shows and movies to the carrier's wireless customers. Verizon also met Vestberg's promise to start 5G service in at least 30 cities by the end in 2019, though in most areas, the coverage was quite limited.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-020-Verizon

Revenue was steady at Verizon and profits surged 24% as new CEO Hans Vestberg pursued a strategy of building the best 5G wireless network without diversifying into the entertainment business, as rivals AT&amp;T and Comcast have done. Instead, Vestberg has smartly partnered with others, including Disney, to supply popular shows and movies to the carrier's wireless customers. Verizon also met Vestberg's promise to start 5G service in at least 30 cities by the end in 2019, though in most areas, the coverage was quite limited.

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This year's Fortune Global 500 generated $27.7 trillion in revenues and $1.5 trillion in profits.

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Here are the World's Most Admired Companies for 2018 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 64th running of the list.

Here are the World's Most Admired Companies for 2017 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 63rd running of the list.

Here are the World's Most Admired Companies for 2016 as ranked in their industries. See who made the list.

This year's Fortune Global 500 generated $27.6 trillion in revenues and $1.5 trillion in profits.

This year's Fortune 500 marks the 62nd running of the list.

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The world's 500 largest companies generated $31.2 trillion in revenues and $1.7 trillion in profits in 2014. Together, this year's Fortune Global 500 employ 65 million people worldwide and are represented by 36 countries.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Global business is back. After limping through a worldwide financial crisis and economic slowdown, the 500 largest companies ranked by revenues shattered all sorts of performance records in 2013: They racked up combined revenues of $31.1 trillion, up 2.5% from 2012, and profits soared 27% to nearly $2 trillion. China’s 95 companies (up from 89 last year) posted $5.8 trillion in revenues. The U.S. has four fewer companies on the list than last year but remains (for now) the country leader, with 128 corporations on the list—including No. 1 Wal-Mart Stores—reporting $8.6 trillion in revenues. 

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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Verizon Communications is a telecommunications conglomerate providing telephone and internet services to consumers and businesses, along with wire-line internet in the Northeast through its fiber-optic network, Verizon Fios. Originating as Bell Atlantic Corp. in 1984, it merged with GTE Corp. in 2000 to become Verizon Communications. Its stock is a component of the Dow Jones industrial average.

Q2 2026

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Q4 2024

Verizon Communications (VZ): Company Profile, Stock Price, News, Rankings

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Verizon Communications

verizon communications

Good morning, and welcome to the Verizon 4th Quarter 2024 Earnings Conference Call. At this time, all participants have been placed in a listen only mode and the floor will be opened for questions following the presentation. Today's conference is being recorded. If you have any objections, you may disconnect at this time. It is now my pleasure to turn the call over to your host, Mr.

Brady Connor, Senior Vice President, Investor Relations.

Thanks, Brad. Good morning, and welcome to our Q4 2024 earnings call and AI update. I'm Brady Connor and on the call with me this morning are Hans Vestberg, our Chairman and Chief Executive Officer and Tony Schiadis, our Chief Financial Officer. In addition, we have our business group CEO, Kyle Malady, who will be giving an update on our AI strategy as well as our Consumer Group CEO, Sam Path, who will also be joining us for Q and A. Before we begin, I'd like to draw your attention to our Safe Harbor statement, which can be found at the start of the investor presentation posted on our Investor Relations website.

Information in this presentation contains statements about expected future events and financial results that are forward looking and subject to risks and uncertainties. Discussions of factors that may affect future results is contained in Verizon's filings with the SEC, which are available on our Investor Relations website. This presentation contains certain non GAAP financial measures. Reconciliations of these non GAAP measures to the most directly comparable GAAP measures are included in the financial materials posted on our website. Earlier this morning, a detailed overview of our Q4 and full year results was posted to our Investor Relations website.

We will also be posting supplemental materials relating to today's call on our website shortly. With that, I'll turn it over to Hans.

Thank you, Brady. Good morning, everyone. I will begin by addressing the wildfires and the devastation that the Los Angeles area has experienced in recent weeks. Our hearts go out to everyone who has been impacted. At Verizon, we always run through a crisis, and this time is no different.

Our teams are working hard to protect and restore service to affected areas, support first responders and help neighbors safeguard themselves. The Verizon Frontline Crisis Response Team is closely coordinating with federal, state and local public safety agencies as they continue wildfire response and mitigation efforts. Verizon's network is holding up strong, maintaining critical connectivity for the community, businesses and first responders. Our engineers have been working around the clock, restoring nearly all of the macro sales sites that were impacted, and we will continue to be here for employees, customers and communities in L. A.

Now let me turn to earnings. We had a successful year with great financial and operational results. We delivered on our financial guidance with 3.1% wireless service revenue growth and 2.1% adjusted EBITDA growth, both exceeding the midpoint of our guided ranges. We generated strong free cash flow while absorbing higher taxes. We added nearly 2,500,000 postpaid mobility and broadband subscribers in the year while expanding our margins.

We ended the year with an industry leading quarter wireless service revenue of $20,000,000,000 In mobility, postpaid phone net adds were nearly 900,000 for the year. Consumer postpaid phone net adds were positive with and without the impact of our 2nd number offering, and business postpaid phone net adds exceeded 500,000. Prepaid net adds, excluding SafeLink, were positive for the year and for the first time since the Tracfone acquisition. This has been a great turnaround by the consumer team. On broadband, we added nearly 1,600,000 subscribers and grew market share in 2024, led by continued success of Fixed Wireless Access.

We ended the year with over 12,300,000 broadband subscribers, including nearly 4,600,000 Fixed Wireless Access subscribers and over $2,100,000,000 on Fixed Wireless Access revenue. We're off to a great start to hit our next milestone of 8000000 to 9000000 Fixed Wireless Access subscribers by 2028. We continue to scale private networks, winning work with the Xerox, Cummins Inc, FIFA and more recently the U. S. Air Force.

We were the only U. S. Carrier to be named a leader in the first ever Gartner Magic Quadrant for private wireless services. Gartner recognized us for our vision, the work we have done to build the market and our industry leading execution. We drove efficiencies and continued the business transformation.

We ended the year with less than 100,000 employees, down close to 20,000 over the last 3 years. Continued business transformation gave us more flexibility to execute on our strategy and capital allocation priorities. We continue to invest in the business and made strategic moves for long term growth. We launched customer first offerings such as My Home and Verizon Access, refreshed our brand and signed strategic transactions including Frontier, the Tower deal, U. S.

Seller Spectrum and Satellite Partnerships. We raised the dividend for the 18th consecutive year and continued debt pay down, ending the year with a net unsecured debt to adjusted EBITDA ratio of 2.3 times. We have a great year with both customer and financial growth as we continue the strategic transformation of the company. Looking forward to 2025, we will continue to focus on our 3 key financial metrics: wireless service revenue, adjusted EBITDA and free cash flow. While Tony will provide these details, I would highlight the underlying wireless service revenue growth is expected to be nearly double the guided range when excluding promo amortization.

With that, I will turn it over to Tony to say a few words about the quarter and

Thanks, Hans, and good morning, everyone. As we reported earlier this morning, we closed the year with strong operational and financial performance. The steps we took in 2024 to improve our execution while maintaining financial discipline continued to bear fruit. We added nearly 1,000,000 postpaid subscribers onto our mobile and broadband platforms in the 4th quarter, our highest quarterly result in over a decade, while also delivering on our financial guidance for the full year.

We delivered solid growth in postpaid mobility with 568,000 postpaid phone net adds in the 4th quarter. This includes 426,000 consumer postpaid phone net adds giving us positive net adds for the full year with and without our second number offering. Business had another solid quarter with 142,000 phone net adds and saw strong growth across all three customer groups. The operational rigor we implemented in prepaid continued to pay off in the Q4. Prepaid net adds were 65,000 excluding SafeLink giving us positive net adds for the full year.

In broadband, we continue to take market share delivering 408,000 net adds in the quarter. Fixed wireless access accounted for 373,000 net adds and Fios added 51,000 subscribers in the quarter, a solid result given the challenges noted by some of our competitors. Importantly, we achieved these strong operational results while delivering on all of our 2024 financial guidance. In fact, both wireless service revenue and adjusted EBITDA were above the midpoint of our guided ranges and our adjusted EBITDA margin expanded 50 basis points for the full year. In the 4th quarter, we delivered 3.1% wireless service revenue growth along with 2.1% growth in adjusted EBITDA as we balanced investing in customer growth with maintaining financial discipline.

Finally, our free cash flow of $5,400,000,000 in the quarter and $19,800,000,000 for the full year allowed us to take meaningful steps to further reduce our debt consistent with our capital allocation priorities and to better position us for the closing of our pending acquisition of Frontier. Note that our 4th quarter free cash flow included approximately $2,000,000,000 in proceeds from the Vertical Bridge Tower transaction. In addition, we made severance payments of approximately $600,000,000 which represents roughly half of the total payments we expect to make as part of our voluntary separation program. Turning to guidance, we entered 2025 with good operational and financial momentum and that is reflected in our outlook. We expect total wireless service revenue to grow between 2% and 2.8%.

The key drivers of this outlook are consistent with 2024 and include improving postpaid consumer phone net additions and continue healthy business phone volumes, pricing actions taken in 2024 that carry over into 2025, continuing to scale fixed wireless access, growing adoption of MyPlan and accompanying Perks and an improving prepaid revenue profile. As we share in the fall, we expect promo amortization headwinds to peak in 2025. That said, the underlying customer economics are very healthy. Please note that beginning in the Q1 of 2025, we are reclassifying more than $2,900,000,000 of annual recurring device protection and insurance related plan revenues from other revenue into wireless service revenue. As a result, our wireless service revenue guidance should be viewed in the context of growth off of a higher base of revenue.

We expect consolidated adjusted EBITDA to grow 2% to 3.5% compared to 2024. This outlook reflects the expected higher wireless service revenue and benefits of ongoing cost transformation initiatives, partially offset by continued pressure in business wireline revenues. The midpoint of the adjusted EBITDA guidance range reflects an expected year over year increase of more than $1,300,000,000 which is $300,000,000 more of expected growth than we delivered in 2024. Full year adjusted earnings per share growth is expected to be in a range of flat to up 3%, reflecting the adjusted EBITDA growth partially offset by higher depreciation and amortization. As we discussed in October, capital spending for the full year is expected to be between $17,500,000,000 $18,500,000,000 This guidance is an all in number that includes all of our growth initiatives.

This includes incremental investments to deploy C band to 80% to 90% of planned sites, accelerating our Fios expansion to up to 650,000 new open for sale locations and launching our fixed wireless MDU solution. As always, we will continue to look for opportunities to efficiently deploy capital. Regarding cash flow, we expect free cash flow in the range of $17,500,000,000 to $18,500,000,000 in 2025. This outlook assumes mid single digit growth in upgrades and no change to current tax legislation. Please note that our guidance excludes any impact from the pending acquisition of Frontier.

We are currently working with all regulatory bodies that must approve the transaction. The process is going as planned and we continue to expect the transaction to close by early 2026. I will now turn the call back over to Hans to go over his 2025 priorities.

Thank you, Tony. Looking ahead, our 2025 priorities are clear: a continued focus on wider service revenue growth, adjusted EBITDA expansion and strong free cash flow accelerated mobility momentum and broadband growth, while scaling private networks as we expand 5 gs, ultra wideband and fiber reach laser focus on operation excellence, financial discipline and customer experience to drive customer and financial growth. Execution of our capital allocation model, investing in the business, supporting and growing our dividend, paying down debt and eventually share repurchases. And we will leverage our fiber and edge compute assets to open new revenue streams from the AI ecosystem. So let me talk about Verizon's AI strategy now.

We have worked with AI for many, many years, and we already today have several generative AI products at scale in our company. We outlined a 3 pronged strategy for AI at Verizon. Let me go through them briefly. Number 1, enhance experiences and drive efficiencies. This is all about employee and customer experiences, driving down cost in our operations.

A good example would be FastPass, which I've talked about before, which is deployed in our mobility call centers to intelligently pair customers with the best available care representative. The second part of the AI strategy at Verizon is to personalize product and solutions. This is much more about how we can be more personalizing the service for our customers. A great product here would be Segment of Me, which is a tool that uses AI to personalize customer experience with unique offers and products. The 3rd pillar of the AI at Verizon strategy, which we haven't talked so much about, but I've promised you several times to come back to it and that we will talk about today is connect to the AI ecosystem.

And that's the focus of today. If you think about where we are on generative AI today, today it's large language modules that are trained at large data centers and that requires enormous capacities. Over time, that will, of course, come much closer to the edge of the network, both for application, but transport cost and latency in some cases. This is creating an opportunity for us and has already created an opportunity as we had revenue and EBITA impact in the Q4. We're now looking into how we can use our assets and our capability to serve this market when it comes to the next step of generative AI.

So I'm very proud and excited to introduce Verizon's AI Connect today. That's our product and solution to address this market and meeting the end customers' needs in the next step of AI generative AI. So by that, I will hand it over to Kyle that will talk about and discuss our opportunities and how we're addressing this market.

Thanks Hans. It's a pleasure to be here this morning. Verizon AI Connect is the name of our strategy and suite of offerings that are intended to meet the growing demand for AI applications from both our ecosystem partners and end user customers. It's a vision that allows us to utilize existing assets in new ways to service this technology revolution. Whether the AI workloads are across a multi cloud environment deployed on our customers' premise or at the edge of the networks, we have a suite of offerings that businesses can utilize to fully leverage AI capabilities.

Our vision is built around best in class connectivity and edge compute assets. It all starts with connectivity. Over the last 20 years, we have built unmatched fiber assets, not only in our ILEC footprint via Fios, but also outside through our 71 city, 1 fiber build out. Together with our industry leading long haul network that stitches these metros together, we can provide lit and dark fiber services to our customers over a large geographic area. We have edge to cloud connectivity and expertise and we are ahead of the curve in this area.

The investments we have made in our converged Intelligent Edge network over the last several years will pay dividends in this new world as users need even more bandwidth and network visibility. Our network is intelligent and programmable. Customers want to control where and when AI workloads are running. And to that, we are building new capabilities to give users more insight and control via new tools. Essentially, we are allowing them to program their network resources to optimize their operation as they see fit.

And finally, Edge Compute. As AI shifts from training to deep deployment, the need for distributed computing will become increasingly important for real time decisions and predictions. We have thousands of distributed telco facilities, many of which already have power, space and cooling available for this compute at the edge. As we take stock of our existing assets, Verizon's ability to be a foundational player in the AI ecosystem is clear. The technical infrastructure required to enable AI is evolving.

AI demands massive amounts of data, powerful chipsets and high speed secure flexible network connectivity. Market analysts estimate there will be over $1,000,000,000,000 of investment in AI infrastructure over the next 10 years and some suggest AI network traffic will grow at 35% plus CAGR over the next 5 years. Enormous investments have been announced and we expect more to come. All of this AI infrastructure will need to be underpinned by secure network connectivity that will bridge the new distributed compute landscape. At Verizon, we see ourselves as not just participants in this AI driven future, but as a key player enabling its success.

Verizon's leadership in the enterprise connectivity market is poised to become even more crucial as AI applications become more widespread among end users. We believe Verizon will serve as the essential link between these Gen AI applications and the firms who utilize them. With growing network of over 16,000 near net enterprise locations, Verizon is positioned at the forefront of the AI deployment, providing the connectivity solutions that will enable the seamless integration of AI applications across the wide range of industries and sectors. We also have extensive connectivity of 3rd party data centers currently ranking a close third in the market. Data centers will continue to be crucial in this new AI powered world and 40% of data centers are expected to face operational constraints by 2027, which is another factor in workloads moving to the edge.

Verizon's extensive fiber and programmable networks are ready to meet these demands across key markets. And we're not alone in recognizing the opportunity. Industry analysts are seeing and predicting further significant growth in the AI market. Hyperscalers are expanding into new markets and they need high capacity connectivity. The industry is seeing a surge in cloud migration and colocation demand.

Lastly, power, space and cooling are the currencies that are in demand right now and we have all three. As we look across our assets, take inventory and compare against other players in the market, we believe that we are in a leadership position when it comes to usable power and space. We have facilities across the United States that either have spare power, space and cooling or can be retrofitted. As we sit here today, we have 2 to 10 plus megawatts of usable power across many of our sites. Also as we move through our network transformation work, we will continue to free up more resources that could be made available for AI Connect.

In addition, we have between 102 100 acres of undeveloped land, some currently zoned for data center build and much of it in prime data center friendly areas. This is not a theoretical discussion. We are seeing increasing demand for our AI Connect offerings. We already have a funnel of over $1,000,000,000 simply leveraging our existing infrastructure. Major players such as Google and Meta have purchased capacity on our network with the intent of using it for their AI workloads.

Some of these deals are reflected in our 4th quarter results and are contributing to the margin improvements you saw in the quarter. We are working closely with industry players like NVIDIA to reimagine how telco functions can work along with AI workloads. We are starting this development at the far edge in a private network. The applicability will go beyond that and potentially into the macro network at some point. I'm also happy to report that we have a new strategic partnership with Vultr, a leading global GPU as a service provider and cloud computing provider.

Initially, Vultr will deploy their GPU as a service infrastructure in one of our data centers and tap into our high capacity fiber network for distribution. We anticipate helping to broaden their reach and enable our mutual customers with AI training and inference capabilities at the edge over time. The bottom line is we are ready to help power the AI ecosystem. We have the assets, the expertise and the vision to deliver AI solutions at scale. By unlocking the potential of our existing assets, we can further improve the financial profile of Verizon Business.

The team has worked hard over the last few years to help mitigate the impact of secular wireline revenue pressures. Together with continued strong results in mobility, FWA expansion and work on cost efficiencies, Verizon AI Connect positions us for success into the future.

Thank you, Kai. I hope you now got more insights to how we see we can connect the AI ecosystem both from the capability point of view and also from the assets we have. And that we already now have customers and solutions in the market, and this is just the beginning. I'm really excited of what we see right now as an opportunity for us in this area. Lastly, we had a great 2024, and I look forward to exciting opportunities and continued growth ahead.

So by that, I hand it over to Brady to handle the Q and A.

Yes. Thanks Hans. Brad, we're ready for the first question.

Thank you. We will now begin the question and answer session. The first question comes from John Hodulik of UBS. Your line is open, sir.

Okay, great. Thanks and good morning, guys. Maybe first starting off with Kyle's commentary on AI Connect. Just any sense to in terms of the overall I know I realize it's early we're getting these announcements seemingly like weekly now, but any sense in how big this opportunity could be both on the connectivity side or in terms of the space and power would be great, just to frame it out for us. And then maybe more operationally, you guys showed some real momentum to end the year both on the wireless side with gross adds up over 5% and in the broadband side.

A, could you talk a little bit about the drivers of that momentum? And have you seen that momentum continue as we started out 2025? Thanks.

Thanks, John. Let me start with the second question and then we'll come back to the AI with Kyle. When it comes to momentum, both in broadband and wireless, both in the business group and in the consumer group, I think we have actually outlined quite a lot of changes in the structure, not only the people we have leading it, but also the products we have deployed, the rebranding we have done. And honestly, we see that our products are resonating. I mean, this is, as we said, when it comes to what we added in new customers in the Q4, best in a decade.

So we're really, really, really excited of what we're seeing. And if you think about the broadband side, that's of course, fixed wireless access is doing great. I mean, so we were together with Fios over 400,000 in the quarter, continue to take share. And on the wireless, we're getting stronger and stronger now. We have several quarters of consecutive improvements.

So I think it's a lot of execution, but also that the products are right, the branding are right and then the network is just improving. I mean, you have seen our numbers from the network, wherever we deploy C band, better premium sell through, opening fixed wireless access and of course, seeing that the lower churn. So all that comes together with an execution we've done over the last couple of years. And I will ask actually Sampat to comment on that and then I will ask Kyle to talk about the AI opportunity, which we think is great with our assets. But first, Sampat.

Thank you, Hans. In 2025, we expect higher phone net adds than in 2024. And in the Q4, we saw really strong momentum in our business. Look, we've had 8 quarters of phone gross add growth and we see that momentum continuing into 2020 5. Couple of reasons why.

The first one is our value prop is resonating very well. I think MyPlan more than half our base is already on MyPlan and that value prop is unique in the market because we give savings to customers that others just unable to give. So that is working very well for us. The second is a lot of the work we did in 2023 2024 on sales execution, local markets, local marketing is starting to pay off even well and we see that continuing into 20 20 The last is there are some opportunity segments that we've tapped into and Q4 was the start of that. The first one was Tier 1 markets.

We've historically had a slightly lower presence in Tier 1 markets. That is shifting. Some of our large markets we are starting to see share market gain in those segments. 2nd is the Latino segment. We've had a concerted effort last couple of quarters to go after that.

So we are a financially disciplined operator. We saw growth. We saw opportunity in Q4 and we went for it.

Hey, John. Thanks for the question on AI Connect. I mean, here's it's our best guess at the moment is the TAM we can sell into with what we have is probably $40,000,000,000 plus. But you see that the every single day there's new announcements of 100 of 1,000,000,000 of dollars going into this ecosystem. And like I spoke about, we have a lot of assets that can play right into this.

And frankly, we have well over $1,000,000,000 plus in funnel right now and that's really only with our services that we have today. That's not even counting the power, space and cooling stuff that I talked about. So I feel this is going to grow. Where it ends up, I think it's anybody's guess, but the investment going into here is massive and we're going to be able to play right into it.

Yes. Thanks John. Brad, we're ready for the next question.

The next question comes from Michael Rollins of Citi. Your line is open.

Thanks and good morning. I'm curious if you can provide a bit more context on the upgrade environment in terms of what you saw from customer behavior during the Q4? And if you could share some additional context on the drivers behind your base case for upgrades that are embedded within the 2025 guidance? And then second, just in terms of financials, if you could just share some of the additional drivers that are contributing to the faster EBITDA growth guidance for 2025 as well as if you could share some of the bridge items between EBITDA guidance and free cash flow guidance for 2025 including things like tax and working capital?

Okay. Thank you, Mike. So when it comes to upgrades, I think that after many, many quarters of decline, we came to a slight growth on upgrades. So that's not strange after many quarters you also will get there. I think that we still have the same sort of facts behind it.

I mean customers on the consumer side keep the phones very long. I mean now we're way over 40 months. And that's, of course, contributing to this. As we spoke about earlier, what we have seen on upgrade cycles is of course very much driven on new technologies and new hardware designs. So we haven't seen much of that lately.

But and of course, the products are way better and more resilient as well. So I think that's what you see. But I will also ask Sampat to make a couple of more comments on that. And on the EBITA expansion, I mean, I will ask Tony to talk about it. But we have worked on the costs.

I mean, the initiatives we have done all the way from voluntary separation program, the outsourcing we have done with HSE with in Kaileshop, the change we did in customer care. We have done a lot on the cost and then of course we start to get the growth and then the model that starts getting leverage. And you see that in our cash flow, you see it in our EBITA. And remember, we're measuring on 3 things, wire service revenue growth and EBITA and cash flow expansion. We showed that in 2024.

Our guidance for 2025 shows the same. So this team is super committed to it. But Samp has some about the upgrade environment.

our lowest upgrade rate in a very long time. In Q4, we saw some modest increase, 10 basis points increase year on year. So we think 2024 was the bottom of our low upgrade rate. And we're going to start seeing gradual improvements in 2025. I think mid single digits is what we've assumed in our plan and our guidance.

And I think we're going to be quite comfortable with that. It's driven by 2 very important things. The first is the life of the device. It's exceeded 40 months right now. And at some point customers will want new devices.

The second is customers coming off that 3 year DPP contract. We have a large cohort in 2025 coming off. So combination of those 2 give us comfort that mid single digit increase in upgrade is what we expect in 2025.

Hey, good morning, Mike. Just on EBITDA, I'll start there. So in 2024, we grew EBITDA about $1,000,000,000 and we also, as Hans said in the prepared remarks, grew subscribers $2,500,000 between broadband and mobility. And that was above the midpoint of the range. In 2025, we said our range was 2% to 3.5% growth, which implies about $1,300,000,000 of growth at the midpoint of the guidance.

It's an acceleration as you mentioned in the growth rate and good operating leverage. It starts with strong service revenue growth and healthy customer economics. And you heard Hans in the prepared remarks talk about the customer economics without the promo amortization. And then Hans mentioned the focus on cost transformation and the work we continue to do to make the business more efficient, whether it's customer care and the work that SanPath is doing, including AI and you heard that upfront as well as the managed services work. Joe is taking a lot of legacy network elements out and that work is ongoing.

And we also have the voluntary separation program, which took shape at the end of last year. We'll see a full year benefit this year. The guide assumes, as you mentioned, a modest increase in upgrades year over year. But overall, we're very confident that we were able to absorb the impact of the promo amortization and have EBITDA growth acceleration. And you see the investments we're making, the strength of the network and the execution as Sanpath mentioned are positioning us for strong EBITDA performance.

And then if I move to cash flow, as Hans mentioned, the cash flow generation of the business continues to be very strong. For the full year in 2024, we delivered $19,800,000,000 in free cash flow and that's inclusive of the Tower deal. There's about $2,000,000,000 there from the Tower deal. And the results of 2024 evidence, as Hans said earlier, that we can manage through significant pressures like cash taxes and still generate a very strong cash flow profile. And when you look at this in the context of the guide, we said $17,500,000,000 to $18,500,000,000 on free cash flow.

We still feel very good about the cash generation. That's an all in range and we're managing to that. And the drivers, Mike, are very similar to what we saw in 2024. It starts with EBITDA growth. And I talked about the $1,300,000,000 at the midpoint.

We gave a range of CapEx of $17,500,000,000 to $18,500,000,000 for 2025. And as always, our network engineers do a great job and they're always going to be very efficient with our capital spending. You saw that in 2024. Interest expense continues to improve. We paid down a significant amount of debt in 2024.

We're down about $7,000,000,000 in total debt. So that will continue to see improvements there. And then on working capital, we continue to focus on driving efficiencies and working capital and that goes beyond handsets as well. And then with cash taxes, really no change there. We'll continue to see pressure from bonus depreciation.

We'll have to see what happens in Washington with any proposed legislation. And the assumption we put in the free cash flow guide was that we'd see a mid single digit year over year increase in upgrades. And obviously Frontier as we said earlier is excluded from the guidance. But look, the guidance reflects the strong cash generation that we have in the business and it allows us to continue our capital allocation priorities whether it's investing in the business, committing to the dividend and continue to delever the balance sheet and you'll see us continue to do that in 2025.

Yes. Thanks, Mike. Brad, we're ready for the next question.

The next question comes from Sebastiano Pettit of JPMorgan. Your line is open, sir.

Hi. Thank you for taking the question. Just in regards just a quick housekeeping question, I guess, for Tony. The $2,900,000,000 of device protection and insurance in 2024, how should we think about the underlying growth rate within that revenue bucket that will be reclassified? Just trying to think about apples to apples service revenue guide.

I mean, how has that been trending, I guess, relative over the last several years and maybe expectations for contribution next year within the context of the overall service revenue guide? Another quick question on fixed wireless. I think in the Q3 Hans, we talked a little bit about perhaps the pace of FWA growth slowing a little bit, maybe because of greater contribution from suburban and rural as C band is deployed in those markets. Strong 4th quarter number here. And also just kind of thinking about you will be standing up an MDU solution in 2025, which should aid the trajectory in the Tier 1 markets.

So maybe any help in thinking about how you expect the MDU solution to scale or the contribution maybe within the, I would imagine the 76 C band markets? And then one last question. As you think about, I think, Sampath, you reiterated expectations for consumer phones to improve net adds to improve ex second line year over year. Great to hear. Anything lots of focus on immigration growth.

Maybe if you can kind of touch upon if there's any slowdown or normal beyond the normalization that we've been seeing across the ecosystem. Is there any expectations for a pronounced slowdown in immigration growth in 2025? Thank you.

Thank you, Sebastiano. Let me start. We will end by the insurance question and Tony will take that one. On fixed wireless access, you're absolutely right. Our C band deployment has a priority number 1, mobility.

And that means that our secondary business case on fixed wireless access, we go to Tier 2 and Tier 3 market right now that is less dense. The speed is the same. I mean, some in the market believe we're slowing down. We're not slowing down. You saw the numbers in the Q4.

The guys are doing fantastic. But of course, a little bit less opportunities going into the first half of 2025 probably. But with the MDU solution also coming in and then ramping up Fios at the same time, we're going to see a continuation of our strength in broadband. And we took market share in 2024 in broadband. And I'm certain we're going to do it again with the fixed wireless access and the Fios we have.

So it's going to be a great year again, the fixed wireless access. And we come with new products. We improve all the time what we're delivering. I'm going to ask Sampo to talk a little bit about that and immigration. But before we come to immigration, I think that we have been managing fantastically with our portfolio to all the customer groups, even though what we see a slower or less big switcher pool.

We have an offering that's actually appealing to the market and we can grow in that with the competition. So I feel confident whatever it might be moves in the market that we can continue. So I will ask Sampat first to comment a little bit and then Tony will answer on the insurance question.

Sebastian, good morning to you. I think on FWA and broadband more general, our value prop is resonating really well with customers. My Home is working very well and it's delivering what customers want. On one end you have FWA which attracts the premium service attracts a premium client base. They like the ease and the convenience of use.

On the other end you have fiber which is highly reliable, very high performance. So we were able to segment the market very well and that's why you're seeing continued success. We are taking more than 50% of all the industry net adds. 50% of all the growth is coming to us in the market. We're going to continue to see that in 2025 as well as we've done in 2024.

For the company, we're going to have between 350,400,000 broadband net adds a quarter. As Hans said, there's going to be some fluctuation across the quarters as we do because we are scaling 3 very big things in this space. The first is rolling out C band in Tier 2, Tier 3 markets. They have a slightly different density and hence a different pace of sales as it works into it. The second is our MDU product for FWA.

We've started it. We're going to see that scaling all into 2025. And the third is our expansion of Fios to 650,000 household OFS there. So all those three things will scale through the year and but we are very comfortable with our 350 to 400 assuming some fluctuations. Also we are starting to see good ARPU increase.

Customers are taking more of our premium plans, gig plans on the Fios side and our premium plans on FWA and it goes back to the resilience and the convenience of our service. On that note, let me kind of speak on behalf of the customers for the moment. For decades most customers have had very limited choice when it comes to broadband providers. You tend to hear the same pain points over and over again. It's opaque pricing, poor reliability and it drives low NPS.

We are very clear, this is what customers want, an offering that delivers high performance and reliability, no gotcha pricing, no promotions that expire in 12 months, pricing that does not double in a year. They want choice, they want transparency. That is what we are delivering to them and that's what customers like. So on that foundation, we are very comfortable with our pacing of 350,000 to 400,000 broadband net adds every single quarter.

Good morning. It's Bassiano. Just on the handset insurance, so just a couple of things here. So it's recurring handset protection revenue and its value that our customers receive that's very complementary to connectivity. We are going to recast the historical revenue, so we'll provide them so you have a comparable view.

The impact is about $2,900,000,000 in 2024. So the baseline of service revenue exiting 2024 is about $82,000,000,000 The impact to growth rates is not significant, maybe 5, 10 basis points and there's obviously no change to the service and other category.

Verizon Communications (VZ) Q4 2024 Earnings Call Transcript

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