Verizon Communications Inc (VZ, Financial) released its Q3 2023 earnings report on October 24, 2023. The company reported strong results, with a significant increase in broadband subscribers and a raised free cash flow guidance for the year, despite a slight decrease in total operating revenue.
Financial Highlights
Verizon reported a 21% YoY increase in broadband subscribers, reaching approximately 10.3 million by the end of Q3 2023. The company's year-to-date cash flow from operations increased by approximately $600 million YoY, and its year-to-date free cash flow increased by $2.2 billion YoY.
However, the company's total operating revenue for Q3 2023 was $33.3 billion, a decrease of 2.6% from Q3 2022. Net income also decreased by 2.8% YoY, reaching $4.9 billion. Despite these decreases, Verizon raised its free cash flow guidance for the year, reflecting the company's strong financial performance.
Wireless Service Revenue Growth
Verizon's total wireless service revenue for Q3 2023 was $19.3 billion, a 2.9% increase YoY. The company also reported postpaid phone net additions of 100,000 and retail postpaid net additions of 581,000. The total retail postpaid churn was 1.15%, and the retail postpaid phone churn was 0.90%.
CEO Commentary
Verizon Chairman and CEO Hans Vestberg commented on the company's Q3 2023 performance, stating,
We continued to make steady progress in the third quarter with a clear focus on growing wireless service revenue, delivering healthy consolidated adjusted EBITDA and increasing free cash flow. Our financial discipline, combined with our healthy balance sheet, enabled us to increase our dividend for the 17th consecutive year, which is the longest current streak of dividend increases in the U.S. telecom industry."
Outlook for 2023
For 2023, Verizon expects cash flow from operations in the range of $36.25 billion to $37.25 billion, and capital spending at the higher end of the previously guided range of $18.25 billion to $19.25 billion. The company also expects free cash flow above $18 billion, a $1 billion increase from the previously issued guidance.
Despite the challenges faced in Q3 2023, Verizon's strong performance in increasing its broadband subscribers and raising its free cash flow guidance demonstrates the company's resilience and potential for growth in the future.
