SMBs, Fixed Wireless Bright Spots in Slumping Verizon Q2 Earnings

Strong results in SMB and fixed wireless broadband offset disappointing Verizon wireless and consumer numbers in its Q2 earnings.

The New York-based carrier lowered guidance for its wireless service revenue from 9-10% to 8.5-9.5%. That followed Verizon reporting that its operating income decreased 7.5% year-over-year over last year’s Q2 earnings. Overall operating revenues slipped nearly 4%, to $33.8 billion. On the consumer side, operating revenues increased a little more than 9%, but higher operating expenses meant that operating income dropped 4.6%, to roughly $7.2 billion.

Moreover, the reported 12,000 monthly wireless phone subscribers added paled in comparison to the analyst forecast of 167,200.

“Although recent performance did not meet our expectations, we remain confident in our long-term strategy,” Verizon chief financial officer Matt Ellis said. “We believe that our assets position us well to generate long-term shareholder value.”

Verizon’s business unit saw its EBITDA decrease 6.5% to $1.75 billion year-over-year, in addition to an operating income decrease of approximately 21%.

But small and medium-size businesses proved a bright spot for Verizon. The carrier’s operating revenues in the segment increased almost 7%, to $3.1 billion. Global enterprise, public sector and wholesale all saw decreases in operating revenues.

Verizon rival AT&T struggled in the business wireline segment again.

Hot Technologies

Verizon revenues for business wireless services and FiOS both increased year-over-year. The company also said global enterprise had its best business wireless service revenue performance since the first quarter of 2020.

Fixed wireless broadband, much hailed by the ILECs, stood out in Verizon’s Q2 earnings. Verizon Business reported 88,000 fixed wireless net additions in the quarter. That’s up from 12,000 a year ago.

Sara Marsh, Verizon’s director of channel strategy and sales enablement, said partner face a “tremendous opportunity” to sell business internet.

Verizon Business Group’s Sarah Marsh

“Business internet is giving them the ability to sell 4G and 5G business internet to their customers, in addition to a lot of services that they can provide,” Marsh told Channel Futures. “Oftentimes, customers need some level of implementation services and managed services. So [business internet] really helps give partners a greater share of wallet with their customer base.”

Channel Initiatives

Marsh spoke to Channel Futures during Verizon’s National Elite VAR Roadshow, which made a stop in Boston on Thursday. The roadshow focuses on putting exclusive channel partners and Verizon sales teams together to collaborate on solutions.

Verizon’s Shannon Calvert

“The channel is at the forefront of all the discussions within each of the segments within the business. It’s not hiding in the background or on the side,” said Shannon Calvert, vice president of channel enablement.

Verizon also recently unveiled a recognition program that will award six partners for various achievements and qualifications.