Verizon revealed during its earnings call Tuesday morning Verizon Media Group had a solid Q4 – total revenues jumped 11.4% to $2.3 billion YOY – marking the first quarter of year-over-year growth since the wireless giant acquired Yahoo in 2017 for $4.48 billion.
Growth in the quarter was fueled by strong advertising trends, with revenue from Verizon Media’s DSP growing 41% YOY.
“We are very pleased with Verizon Media Group’s performance,” said Verizon CFO Matt Ellis. “Advertising strength came from political, consumer products, technology and retail among other verticals.”
Ellis added that Verizon also saw “continued high consumer engagement in commerce” in Q4 as more consumers used Verizon’s owned and operated properties this holiday season, due to the pandemic. The company said that ad revenue grew 25% YOY, with particular strength in finance and news, around which daily active users increased 52% and 11%, respectively.
Verizon also reported a $119 million loss in Q4 “primarily related to the disposition of the HuffPost business” to BuzzFeed as part of a stock deal in November. Verizon inherited HuffPost in 2015 when it acquired AOL for $4.4 billion, although Verizon’s efforts to improve the digital media side of its business failed to gain traction, and the company wrote down the value for much of that business in 2018.
Asked about the long-term strategy for the Verizon Media Group business – and whether unloading HuffPost marked the beginning of the dismantling of that unit – CEO Hans Vestberg said the team did an “outstanding job” growing the business, which included consolidating 10 to 15 different ad tech platforms into one.
“We’re in a position that we’re really happy with … we are now in the position where I wanted it to be,” he said.
While much of the earnings call centered on the company’s 5G capabilities – Verizon launched its nationwide 5G service this quarter to coincide with the release of Apple’s iPhone 12 lineup – Verizon also said that it recently added Discovery Plus to its list of strategic partnerships, which includes Apple and Disney. Vestberg said the company will seek out similar DTC partnerships.
“On the wireless side, our DTC strategy is great,” he said. “We’re not going to have 100 different types of offerings but Discovery Plus, Disney Plus, they are sort of super A-list brands that we want to work with. We will look for more DTC that are seeping into our customer base … we’ll continue with that.”
When it comes to Fios, Vestberg said the company is continuing with video “but you’re also starting to see us mix and match to allow for more customer choice.”
“If they want a DTC solution, or if they want linear or they want over-the-top, they should be able to choose it,” he said. “If you look at the numbers in the fourth quarter, we continue to grow our Fios internet customers and we have a decline in the video customers, and that’s good for us financially. But ultimately, it is to meet the customers’ needs.”
Verizon beat quarterly earnings estimates, with total Q4 operating revenues down 0.2% to $34.7 billion YOY, while net income dropped nearly 10 percent to $4.7 billion from Q4 2019.
During the call, Verizon announced quarterly earnings of $1.21 per share, compared to $1.13 per share a year ago. Analysts had expected earnings of $1.16 per share, according to Nasdaq.
