Frontier Communications Parent (FYBR) Q2 2024 earnings summary

Executive summary

• Achieved record fiber broadband net additions and accelerated revenue growth in Q2 2024, with fiber now representing the majority of customers, revenue, and EBITDA, and industry-leading Net Promoter Score six times higher than cable competitors.

• Second consecutive quarter of revenue growth, targeting first full year of consolidated revenue growth in over a decade.

• Adjusted EBITDA increased 5% year-over-year to $560 million, driven by strong fiber performance and cost savings.

• Net loss of $123 million, primarily due to a non-cash pension remeasurement and a $25 million legal settlement.

• Operational focus on building and selling fiber, improving customer service, and increasing efficiency has led to sustained financial and operational momentum.

Financial highlights

• Q2 2024 revenue was $1.48 billion, up 2.1% year-over-year, with fiber broadband revenue up 13%.

• Adjusted EBITDA reached $560 million, up 5% year-over-year, with margin expanding to 37.8%.

• Net cash from operations was $374 million for Q2 and $709 million for the first half of 2024.

• Capital expenditures for Q2 were $678 million (including vendor financing), with first half 2024 capex at $1.29 billion.

• Operating income for Q2 was $91 million; diluted EPS was $(0.49).

Outlook and guidance

• Raised the low end of 2024 Adjusted EBITDA guidance to $2.22–$2.25 billion, reflecting strong first-half performance and implying 5% growth at midpoint.

• 2024 capital investment expected to be $3.0–$3.2 billion, below 2023 levels, with fiber build optimized for 1.3 million new locations.

• Net cash interest payments expected at $760 million; cash taxes reduced to $10 million.

• Sufficient liquidity and cash flow projected to fund operations, capital expenditures, and debt service for the next 12 months.

• Q3 net adds anticipated to be up significantly year-over-year, with ARPU expected to be flat sequentially before picking up in Q4.