Frontier Communications Reports $5.9 Billion Revenue, 3% Increase, and Announces Merger with Verizon

Frontier Communications Parent, Inc. reported a revenue of approximately $5.9 billion for the fiscal year ending December 31, 2024, marking a 3% increase from the previous year. The company's revenue composition reflects a significant shift towards fiber-optic products, which accounted for about 57% of total revenue, while copper products contributed 42%. This transition is part of Frontier's strategic focus on expanding its fiber network, which has seen a notable increase in customer adoption, with fiber broadband customer net additions reaching 385,000, a 19% increase compared to 2023. Overall, Frontier achieved a total of 151,000 net broadband customer additions in 2024, despite ongoing losses in its copper broadband segment.

The company has made substantial progress in its fiber deployment strategy, successfully adding approximately 1.3 million new fiber locations in 2024, bringing the total to about 7.8 million locations passed with fiber. This expansion is expected to enhance revenue generation as the company anticipates a shift in its business mix towards fiber, which is projected to yield higher returns. Frontier's fiber broadband penetration in its base footprint increased to 46.2%, up from 44.5% in 2023, while penetration in newly expanded areas rose to 19.6% from 17.5%. The company aims for a terminal penetration rate of 45% or higher in its fiber markets.

In terms of operational efficiency, Frontier achieved gross annualized cost savings of $597 million, exceeding its initial target of $250 million. The company has also focused on improving customer experience, resulting in a low fiber broadband churn rate of 1.36% for 2024. However, the company faced challenges, including a decline in operating income to $353 million from $492 million in 2023, primarily due to decreased revenues from voice and video services and increased administrative expenses.

Strategically, Frontier entered into a merger agreement with Verizon Communications Inc. on September 4, 2024, under which Verizon will acquire Frontier for $38.50 per share, representing a 43.7% premium over the stock's average price prior to market speculation about the sale. The merger is expected to close by the first quarter of 2026, pending regulatory approvals. Frontier's financial outlook remains cautious, as the company navigates potential impacts from supply chain disruptions, inflationary pressures, and competitive market conditions. The company continues to prioritize its fiber expansion initiatives while managing its substantial debt load, which stood at approximately $11.6 billion as of December 31, 2024.