Frontier Communications Parent, Inc.

Frontier reported second-quarter 2024 revenue of $1.48 billion, up 2% year over year. Adjusted EBITDA was $560 million, up 5% year over year, and management said this was the fourth consecutive quarter of adjusted EBITDA growth. The company reported a net loss of $123 million, mainly due to a non-cash pension remeasurement and a $25 million one-time legal settlement. Net cash from operations was $374 million, bringing trailing-12-month cash from operations to $1.4 billion. Fiber broadband revenue increased 21%, consumer revenue grew for the fourth consecutive quarter, and business/wholesale revenue grew 4%. For guidance, Frontier raised the low end of its 2024 EBITDA outlook to $2.22 billion to $2.25 billion, which management said implies 5% growth at the midpoint; it reiterated the other key components. Management also said Q3 and Q4 capital investment should be roughly flat with Q2, and that full-year 2024 capital investment should be lower than 2023.

Nick Jeffery framed the quarter as evidence that Frontier’s fiber strategy is working, saying the company is seeing its second straight quarter of revenue growth and its fastest organic growth in more than a decade. He emphasized four pillars: building fiber, selling fiber, improving service, and improving efficiency, and said the company has now passed more than 7 million locations with fiber. His tone was confident and expansive, especially around Frontier’s NPS gains, the 100-gig trial with Nokia, and the idea that Frontier is increasingly the largest pureplay fiber company in America with growing revenues and profitability.

Scott Beasley focused on the numbers behind the operating momentum. He highlighted record 388,000 fiber passings in the quarter, 92,000 fiber broadband net adds, fiber ARPU growth of 3.5%, and consumer fiber churn roughly flat at 1.4%. He said cash capital investment was $678 million, down about $350 million sequentially and about $380 million year over year, and noted $580 million of cost savings since the program began in 2021. He also pointed to the July 1 fiber securitization that raised $750 million at a weighted average yield of 7.4%, with about $400 million used to repay floating-rate term loan debt and the maturity extended to 2031.

Analysts pressed management on ACP, ARPU, gross ads, cost-to-connect, self-install, margin seasonality, and the strategic review. Management said ACP is about 4% of the customer base, some voluntary disconnects were seen in Q2, and the impact should be larger in Q3 and Q4; however, they still expect Q3 net ads to be up significantly year over year. On ARPU, management said Q3 should be roughly flat sequentially because of ACP transition plans, with a pickup in Q4 to finish the year in the 3% to 4% long-term range. On strategy, Frontier said the investor update is tied to the ongoing strategic review, but it would not comment on press speculation; it said fiber’s returns, penetration progress, and rising strategic optionality all support consideration of partnerships, JVs, divestitures, and other structures.