Q & A Highlights

Q : Can you provide more details on the AI Connect opportunity and its potential size? A : Hans Vestberg, CEO, explained that the AI Connect opportunity is significant, with a total addressable market (TAM) of over $40 billion. Verizon has over $1 billion in its sales funnel, primarily from existing services. The investment in AI is massive, and Verizon is well-positioned to leverage its assets to capture this market. (Kyle Malady, CEO of Verizon Business Group, added that the current funnel is mainly connectivity services, but they plan to expand offerings to include power, space, and cooling.)

Q : What are the drivers behind the momentum in wireless and broadband, and is this expected to continue into 2025? A : Hans Vestberg, CEO, noted that Verizon's momentum is due to structural changes, product deployment, rebranding, and network improvements. The company added the most new customers in a decade during Q4 2024. Fixed wireless access and fiber are driving broadband growth, while wireless is seeing consecutive improvements. Sowmyanarayan Sampath, CEO of Verizon Consumer Group, added that the value proposition of myPlan and local market strategies are resonating well, contributing to continued growth into 2025.

Q : Can you elaborate on the upgrade environment and its impact on 2025 guidance? A : Hans Vestberg, CEO, mentioned that after many quarters of decline, upgrades are starting to grow slightly. Customers are keeping phones longer, now over 40 months, but new technologies and hardware designs could drive upgrades. Sowmyanarayan Sampath, CEO of Verizon Consumer Group, expects mid-single-digit growth in upgrades in 2025, driven by customers coming off three-year contracts and the need for new devices.

Q : How is Verizon planning to achieve faster EBITDA growth in 2025? A : Anthony Skiadas, CFO, explained that Verizon expects 2% to 3.5% EBITDA growth in 2025, driven by strong service revenue growth, cost transformation initiatives, and healthy customer economics. The company is focusing on cost efficiencies, including customer care improvements and managed services, and expects benefits from the voluntary separation program.

Q : What is the outlook for Verizon's fixed wireless access (FWA) growth, and how will the MDU solution contribute? A : Hans Vestberg, CEO, stated that FWA growth remains strong, with continued market share gains expected in 2025. The MDU solution will scale throughout the year, complementing the C-band deployment in Tier 2 and Tier 3 markets. Sowmyanarayan Sampath, CEO of Verizon Consumer Group, added that Verizon aims for 350,000 to 400,000 broadband net adds per quarter, driven by FWA and Fios expansion.

For the complete transcript of the earnings call, please refer to the full earnings call transcript .

This article first appeared on GuruFocus .