Verizon Communications Inc. (NYSE:VZ)

The analyzed financial data reveals several notable trends across the periods from December 31, 2020, through December 31, 2024. The value of wireless licenses exhibited a consistent upward trajectory, increasing substantially from US$96,097 million in 2020 to US$156,613 million in 2024. This represents a significant investment and accumulation in wireless license assets over the five-year span.

Goodwill showed an increase from 2020, peaking around 2022 at US$28,671 million before declining to approximately US$22,841 million by the end of 2024. This decline may indicate impairment charges or other adjustments reducing goodwill in recent years.

Customer lists, representing another intangible asset class, displayed mostly stable values, with minor fluctuations around the range of US$4,000 million to US$4,300 million. The value in 2024 (US$4,242 million) remains close to the 2020 value, indicating relatively steady valuation of this asset category.

Non-network internal-use software assets showed continuous growth throughout the period. Starting at US$21,685 million in 2020, this asset category increased steadily to US$28,136 million by the end of 2024. This upward trend signals ongoing investment in software infrastructure not related to the network, indicating an emphasis on digital or internal operational capabilities.

Other intangible assets, in gross amount, also followed a rising trend, growing from US$27,477 million in 2020 to US$35,042 million in 2024. This rise suggests further acquisition or development of intangible assets outside the specifically named categories.

Accumulated amortization consistently increased in absolute value, moving from -US$18,064 million in 2020 to -US$23,913 million in 2024. The growing accumulated amortization indicates ongoing systematic reduction of intangible asset book values over time, reflecting normal expense recognition.

Net amounts of other intangible assets (gross amount less accumulated amortization) showed some volatility but remained relatively stable, fluctuating slightly between US$9,413 million in 2020 and US$11,129 million in 2024, without a clear directional trend.

The combined total of wireless licenses, goodwill, and other intangible assets rose sharply from US$133,055 million in 2020 to an approximate plateau near US$190,000 million in the years 2022 to 2024. This plateau suggests that the total intangible asset base reached a stabilized level after several years of growth.

Key Observations:

- Significant investment and growth in wireless licenses over the period.

- Initial increase then decline in goodwill implies possible asset impairments or restructuring.

- Stable customer lists values, indicating consistent valuation of related intangibles.

- Steady increase in non-network software indicates increased focus on internal technological assets.

- Growing accumulated amortization reflects standard amortization practices.

- Overall intangible asset base grew substantially before stabilizing in recent years.

Total Assets

The reported total assets increased consistently over the five-year period, rising from $316,481 million in 2020 to $384,711 million in 2024. This represents a steady growth trend, with the annual increments slowing slightly in the later years. Similarly, the adjusted total assets, which exclude goodwill, also showed a consistent upward movement from $291,708 million in 2020 to $361,870 million in 2024, indicating an overall expansion in asset base even after adjustments.

Equity Attributable to Verizon

Reported equity attributable to Verizon grew steadily from $67,842 million in 2020 to $99,237 million in 2024. The adjusted equity, which excludes goodwill effects, demonstrated a more pronounced growth pattern, increasing from $43,069 million in 2020 to $76,396 million in 2024. This suggests that a significant portion of equity growth is attributable to operating performance and retained earnings rather than goodwill adjustments.

Net Income Attributable to Verizon

Reported net income experienced fluctuations during the period. It increased from $17,801 million in 2020 to a peak of $22,065 million in 2021, then declined to $11,614 million in 2023 before recovering slightly to $17,506 million in 2024. Adjusted net income showed a similar trend but with less volatility between 2022 and 2023, maintaining a more stable performance around $17,000 to $21,000 million. The adjustments appear to moderate net income fluctuations caused by non-operational factors such as goodwill impairments.

Insights and Overall Trends

The data underscores a general growth in the company’s asset base and equity over the five-year horizon, reflecting ongoing expansion and capital accumulation. The divergence between reported and adjusted figures highlights the impact of goodwill on the reported equity and asset values, with adjustments offering a clearer view of the core operating finance. Net income volatility, particularly the decline observed in 2023 under reported values, suggests some operational or extraordinary items affecting profitability, yet adjusted results indicate a more stable underlying income. This pattern implies that goodwill-related adjustments are significant in assessing the company’s true financial performance.

Net Profit Margin

The reported net profit margin shows an increase from 13.88% in 2020 to a peak of 16.51% in 2021, followed by a slight decline to 15.53% in 2022. It then drops significantly to 8.67% in 2023 before partially recovering to 12.99% in 2024. The adjusted net profit margin follows a similar pattern but exhibits a more stable trend with a smaller decline in 2023 (13.05%) and matching the reported margin in 2024 (12.99%). This suggests that adjustments related to goodwill provide a smoother profitability measure over the years.

Total Asset Turnover

Both reported and adjusted total asset turnovers demonstrate a gradual decline over the period. The reported ratio decreases from 0.41 in 2020 to 0.35 in 2024, indicating a reduction in the efficiency of asset usage to generate revenue. The adjusted turnover is consistently higher than the reported, starting at 0.44 in 2020 and declining to 0.37 in 2024, suggesting that removing goodwill affects asset base valuation and hence turnover ratios.

Financial Leverage

The financial leverage ratio shows a declining trend in both reported and adjusted figures. The reported leverage decreases from 4.66 in 2020 to 3.88 in 2024, while the adjusted leverage falls more sharply from 6.77 to 4.74 in the same period. This indicates a progressive reduction in reliance on debt or liabilities relative to equity, with adjustments for goodwill emphasizing a higher leverage initially but converging downward over time.

Return on Equity (ROE)

Reported ROE increases slightly from 26.24% in 2020 to 26.98% in 2021, then declines steadily to 12.57% in 2023 before rising again to 17.64% in 2024. In contrast, adjusted ROE starts higher at 41.33% in 2020, remains relatively stable in 2021, and then decreases more markedly to 22.91% by 2024. The adjusted ROE remains consistently above the reported ROE, reflecting the impact of excluding goodwill, which enhances equity returns initially but shows more pronounced declines over time.

Return on Assets (ROA)

The reported ROA moves upward from 5.62% in 2020 to 6.02% in 2021, then declines to 3.05% in 2023 before a slight improvement to 4.55% in 2024. Adjusted ROA maintains higher values than reported, starting at 6.10% in 2020 and gradually decreasing to 4.84% in 2024. The adjusted figures suggest that, after accounting for goodwill, asset profitability remains more consistent but follows the same downward trend as reported ROA in later years.

Net Income Trends

The reported net income attributable to the company increased from 17,801 million USD in 2020 to a peak of 22,065 million USD in 2021, followed by a slight decline to 21,256 million USD in 2022. A significant decrease occurred in 2023, with net income falling sharply to 11,614 million USD, before partially recovering to 17,506 million USD in 2024.

When adjusted for goodwill, net income exhibits a similar pattern but shows less volatility in 2023. Adjusted net income matches reported figures until 2022 but is notably higher in 2023 at 17,482 million USD compared to the reported 11,614 million USD. In 2024, adjusted net income aligns exactly with the reported figure at 17,506 million USD, indicating adjustments primarily impacted the 2023 figures.

Net Profit Margin Trends

The reported net profit margin followed a trend similar to net income, rising from 13.88% in 2020 to 16.51% in 2021, then slightly decreasing to 15.53% in 2022. It declined sharply to 8.67% in 2023, before rebounding moderately to 12.99% in 2024.

Adjusted net profit margin displays a more moderated decline in 2023, decreasing from 15.55% in 2022 to 13.05% instead of 8.67%, reflecting the goodwill adjustments that likely mitigated the negative impact on profitability metrics. By 2024, adjusted net profit margin and reported margin converge at 12.99%, indicating the adjustment effect was temporary or one-off in nature for 2023.

General Observations

The data reveals that 2023 was an outlier year marked by a significant downturn in reported profitability and net income. The goodwill adjustments suggest that certain non-cash or accounting factors influenced the reported results, as adjusted figures indicate a less severe impact. Recovery trends in 2024 show improvements but have not fully returned to the elevated levels seen in 2021 and 2022. This pattern suggests the company faced either operational challenges or extraordinary expenses in 2023 that affected earnings and margins, with partial recovery evident in the subsequent year.

The data reveals notable trends in both total assets and asset turnover ratios over the five-year period ending in 2024. There is a consistent increase in total assets, both reported and goodwill adjusted, indicating steady growth in the asset base.

Total Assets

The reported total assets have grown from US$316,481 million in 2020 to US$384,711 million in 2024. This represents an overall increase of approximately 21.5% over the period. Similarly, the adjusted total assets, which exclude goodwill, also increased from US$291,708 million to US$361,870 million, reflecting a comparable growth trajectory of around 24%.

Asset Turnover Ratios

Both reported and adjusted total asset turnover ratios show a declining trend. The reported total asset turnover decreased from 0.41 in 2020 to 0.35 by 2024, indicating a reduction in the efficiency of asset usage for generating revenue. The adjusted asset turnover ratio shows a similar pattern, falling from 0.44 to 0.37 over the same period. This suggests that, despite increasing asset bases, the company is generating relatively less revenue per unit of asset.

In summary, while the asset base has expanded steadily, the declining asset turnover ratios may signal challenges in maintaining revenue growth commensurate with asset growth. This pattern could reflect changes in business operations, capital intensity, or shifting market dynamics affecting asset productivity.

The financial data reveals several key trends over the five-year period.

Total Assets

Reported total assets consistently increased from US$316,481 million in 2020 to US$384,711 million in 2024, indicating steady asset growth. Adjusted total assets, which remove goodwill, show a similar upward trajectory from US$291,708 million in 2020 to US$361,870 million in 2024. The gap between reported and adjusted total assets suggests a stable presence of goodwill over time, though the relative difference slightly narrows.

Equity Attributable to Verizon

Reported equity rose significantly from US$67,842 million in 2020 to US$99,237 million in 2024, reflecting an approximate 46% increase over the period. The adjusted equity, excluding goodwill, also increased substantially from US$43,069 million in 2020 to US$76,396 million in 2024, a more pronounced percentage increase of about 77%. This indicates that the company's core equity base has strengthened notably.

Financial Leverage

Reported financial leverage ratios show a declining trend from 4.66 in 2020 to 3.88 in 2024, suggesting a gradual reduction in the relative amount of debt financing versus equity. The adjusted financial leverage ratio, which accounts for goodwill adjustments, is higher in each period but similarly declines from 6.77 in 2020 to 4.74 in 2024. The decline in both reported and adjusted leverage ratios implies improved capital structure and potentially lower financial risk.

Over the examined period, reported net income attributable to the company showed an initial increase from 17,801 million US dollars in 2020 to a peak of 22,065 million in 2021, followed by a slight decline in 2022. Subsequently, net income experienced a significant drop in 2023, reaching 11,614 million, before recovering to 17,506 million in 2024. The adjusted net income follows a similar pattern but demonstrates greater stability in the latter years, particularly between 2023 and 2024, where it remains nearly constant at approximately 17,500 million.

Reported equity attributable to the company consistently increased throughout the timeframe, starting at 67,842 million US dollars in 2020 and reaching 99,237 million by 2024. Adjusted equity also showed steady growth, though at a lower base and smaller scale, rising from 43,069 million in 2020 to 76,396 million in 2024. The gap between reported and adjusted equity widened over time, indicating that goodwill and other adjustments have become a more significant component of the company’s reported equity position.

Regarding profitability ratios, reported return on equity (ROE) exhibited a declining trend, falling from 26.24% in 2020 to 12.57% in 2023 before slightly rebounding to 17.64% in 2024. The adjusted ROE, which accounts for goodwill and other adjustments, followed a similar downward trajectory but started and remained at higher absolute levels compared to the reported ROE. It decreased from 41.33% in 2020 to 22.91% in 2024, reflecting a substantial reduction in adjusted profitability over the period. Notably, the decline in adjusted ROE is less severe than that of reported ROE, suggesting the adjustments mitigate some of the apparent decrease in efficiency.

Overall, the data indicates that while equity has grown steadily, net income and profitability have experienced volatility with a notable dip in 2023 followed by partial recovery. The persistence of higher adjusted ROE compared to reported ROE highlights the impact of goodwill and other non-operational items on the company's financial returns, underlining the importance of analyzing adjusted figures for a clearer assessment of operational performance trends.

The financial data exhibits several notable trends over the five-year period ending in 2024. Net income figures, both reported and adjusted, display fluctuations with an overall downward deviation after peaking in 2021. By 2023, reported net income experienced a significant decline, nearly halving compared to its 2021 peak, before rebounding slightly in 2024. Adjusted net income follows a similar pattern but shows a less pronounced dip in 2023, aligning closely with reported figures in 2024.

Total assets demonstrate a steady increase each year under both reported and adjusted measures. The growth rate of adjusted total assets is slightly more moderated compared to reported assets, reflecting the impact of goodwill adjustments on asset valuation. Despite this, the upward trend indicates consistent asset base expansion throughout the period.

Return on assets (ROA) metrics, both reported and adjusted, decline substantially from 2021 to 2023, indicating diminishing efficiency in generating profits from the asset base during this interval. The adjusted ROA remains consistently higher than the reported ROA in every year, suggesting that adjustments—likely related to goodwill—contribute to a more favorable assessment of asset profitability. Both reported and adjusted ROA show partial recovery in 2024 but do not return to peak levels observed in 2021.

Net Income Trends

Reported net income rose from 17.8 billion USD in 2020 to a peak of 22.1 billion USD in 2021, followed by a mild decrease in 2022, a sharp fall to 11.6 billion USD in 2023, and a partial recovery to 17.5 billion USD in 2024.

Adjusted net income closely mirrors reported figures but reflects a smoother decline in 2023, suggesting that adjustments help mitigate one-time or non-operational factors influencing profitability.

Asset Growth Patterns

Total assets under both reported and adjusted values grew steadily from approximately 316.5 billion USD in 2020 to about 384.7 billion USD (reported) and 361.9 billion USD (adjusted) by 2024.

The difference between reported and adjusted asset values, increasing progressively, highlights the continuing impact of goodwill and related adjustments on the company’s balance sheet.

Return on Assets (ROA) Dynamics

Reported ROA rose from 5.62% in 2020 to 6.02% in 2021 then declined consistently to 3.05% in 2023 before partially recovering to 4.55% in 2024.

Adjusted ROA follows a similar pattern but maintains higher levels across all years, peaking at 6.53% in 2021 and stabilizing around 4.8% in 2024.

The gap between adjusted and reported ROA suggests that goodwill adjustments favorably affect the perceived asset efficiency.