Analysis of Reportable Segments
Verizon Communications Inc. operates in 2 segments: Verizon Consumer Group and Verizon Business Group.
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Segment Profit Margin
Verizon Communications Inc., profit margin by reportable segment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Verizon Consumer Group | |||||
| Verizon Business Group |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Verizon Consumer Group Profit Margin Trends
-
The profit margin for the Verizon Consumer Group exhibited a decline from 32.59% in 2020 to 27.87% in 2022, indicating a noticeable reduction in profitability over this period. Following this decrease, the margin showed a slight recovery in 2023 and 2024, rising to 28.55% and 28.65%, respectively. Despite the modest rebound in the last two years, the profit margin remains below the 2020 level, reflecting ongoing challenges in maintaining previous profit levels.
- Verizon Business Group Profit Margin Trends
-
The Verizon Business Group experienced a consistent decrease in profit margin across the entire period under review. Starting from 12.19% in 2020, the margin steadily dropped each year to reach 6.97% in 2024. This represents a significant erosion of profitability, amounting to a decline of nearly 43% over the five-year span. The downward trend suggests increasing cost pressures or competitive challenges impacting the segment’s earnings efficiency.
- Comparative Insights
-
Comparing the two segments reveals that the Consumer Group maintains a substantially higher profit margin than the Business Group throughout the period. While the Consumer Group’s margins show some resilience and a partial rebound after 2022, the Business Group’s profitability consistently declines without signs of recovery. This divergence may highlight differences in market dynamics, cost structures, or strategic positioning between the two segments.
Segment Profit Margin: Verizon Consumer Group
Verizon Communications Inc.; Verizon Consumer Group; segment profit margin calculation
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Operating income | |||||
| Operating revenues | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Segment profit margin = 100 × Operating income ÷ Operating revenues
= 100 × ÷ =
- Operating Income
- Operating income showed a general upward trend over the analyzed period. It increased from $28,856 million in 2020 to $29,484 million in 2024, with minor fluctuations observed in intermediate years. The highest value within this period was recorded in 2021 at $29,955 million, followed by a slight decline in 2022 and stabilization thereafter.
- Operating Revenues
- Operating revenues exhibited consistent growth from 2020 through 2024, rising from $88,533 million to $102,904 million. Revenues increased steadily each year, with the largest increment occurring between 2021 and 2022. A slight decline was noted from 2022 to 2023; however, revenues rebounded marginally in 2024.
- Segment Profit Margin
- The segment profit margin experienced a declining trend over the timeframe analyzed. Beginning at 32.59% in 2020, it dropped significantly to 27.87% by 2022. After 2022, a modest recovery occurred, with margins rising slightly to 28.65% in 2024 but remaining below the levels seen in 2020 and 2021.
Segment Profit Margin: Verizon Business Group
Verizon Communications Inc.; Verizon Business Group; segment profit margin calculation
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Operating income | |||||
| Operating revenues | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Segment profit margin = 100 × Operating income ÷ Operating revenues
= 100 × ÷ =
- Operating Income
- The operating income exhibited a consistent decline over the observed period, decreasing from $3,773 million in 2020 to $2,058 million in 2024. This represents a substantial reduction of nearly 45% over five years, indicating a significant erosion in earnings from operations within the segment.
- Operating Revenues
- Operating revenues remained relatively stable from 2020 to 2022, hovering around the $31,000 million mark. However, a gradual decrease is apparent from 2023 onward, falling from $30,122 million to $29,531 million in 2024. While the decline is modest, it suggests a subtle contraction in sales or service income.
- Segment Profit Margin
- The segment profit margin also demonstrated a downward trend, beginning at 12.19% in 2020 and declining to 6.97% in 2024. The margin reduction is indicative of diminishing profitability relative to revenues, with the steepest drops between 2021 and 2023, followed by a slight stabilization in 2024.
- Overall Analysis
- The data points to a deteriorating profitability scenario within the segment, likely influenced by compressed margins and decreasing operating income. Although operating revenues have remained comparatively steady initially, the marginal decline in recent years, coupled with the sharp fall in operating income, suggests increasing cost pressures or pricing challenges impacting overall financial performance. The near halving of operating income alongside shrinking profit margins could warrant further investigation into cost management, competitive dynamics, or structural changes affecting this business unit.
Operating revenues
Verizon Communications Inc., operating revenues by reportable segment
US$ in millions
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Verizon Consumer Group | |||||
| Verizon Business Group | |||||
| Total reportable segments |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The operating revenues for the reported segments exhibit distinct trends over the five-year period. The Verizon Consumer Group shows a consistent increase from 2020 through 2022, rising from 88,533 million US dollars to 103,506 million US dollars. However, in 2023, there is a slight decline to 101,626 million US dollars, followed by a marginal increase to 102,904 million US dollars in 2024. This suggests a period of growth followed by a brief contraction and minor recovery within the consumer segment.
In contrast, the Verizon Business Group's revenues remain relatively flat with minimal fluctuations. Starting at 30,962 million US dollars in 2020, revenues hover just above 31,000 million in 2021 and 2022, but then decline in 2023 and continue to decrease to 29,531 million US dollars by 2024. This indicates a trend of stagnation followed by a gradual decline in the business segment's operating revenues.
The total reportable segments' revenues mirror the combined effect of the two consistent patterns. The total rises steadily from 119,495 million US dollars in 2020 to a peak of 134,578 million US dollars in 2022. Subsequently, it decreases slightly to 131,748 million in 2023 and then increases marginally to 132,435 million in 2024. This overall pattern reflects the stronger performance of the consumer group largely offsetting the declining trend observed in the business group during the most recent years.
- Verizon Consumer Group
- Rising revenue trend between 2020 and 2022, slight decline in 2023, followed by a minor recovery in 2024.
- Verizon Business Group
- Relatively stable revenues through 2021 and 2022, with a downward trajectory starting in 2023 and continuing in 2024.
- Total Reportable Segments
- Growth in total revenues from 2020 to 2022, slight dip in 2023, and modest increase in 2024, influenced by divergent segment performances.
Operating income
Verizon Communications Inc., operating income by reportable segment
US$ in millions
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Verizon Consumer Group | |||||
| Verizon Business Group | |||||
| Total reportable segments |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Verizon Consumer Group Operating Income
- Operating income for the Consumer Group showed a generally stable trend over the five-year period. Starting at 28,856 million US dollars in 2020, it increased to 29,955 million in 2021. However, there was a slight decline to 28,846 million in 2022, followed by a modest recovery to 29,011 million in 2023 and further growth to 29,484 million in 2024. Overall, the Consumer Group maintained a consistent level of operating income with minor fluctuations.
- Verizon Business Group Operating Income
- The Business Group exhibited a clear downward trend in operating income across the examined years. Beginning at 3,773 million US dollars in 2020, income decreased sequentially each year to 3,437 million in 2021, 2,631 million in 2022, 2,066 million in 2023, and finally 2,058 million in 2024. This reflects a significant erosion in profitability or operating performance in the Business Group segment over the time frame.
- Total Reportable Segments Operating Income
- The total operating income of the reportable segments showed a moderate decline over the period. It increased from 32,629 million US dollars in 2020 to 33,392 million in 2021 but then declined consistently in the following years, reaching 31,477 million in 2022, 31,077 million in 2023, and slightly recovering to 31,542 million in 2024. The overall trend indicates a slight reduction in aggregate segment profitability, mainly influenced by the declining results in the Business Group, somewhat offset by the relatively stable Consumer Group income.