Sprint Press Release
October 31, 2018
OVERLAND PARK, Kan., Oct. 31, 2018 /PRNewswire/ —
- Wireless service revenue grew year-over-year for the first time in nearly five years, excluding the $173 million impact of the new revenue recognition standard
- Net income of $196 million, operating income of $778 million, and adjusted EBITDA* of $3.3 billion
- Fourth consecutive quarter of net income and 11th consecutive quarter of operating income
- Highest fiscal second quarter adjusted EBITDA* in 12 years and raising fiscal year 2018 adjusted EBITDA* outlook
- Net cash provided by operating activities of $2.9 billion and adjusted free cash flow* of $525 million
- Positive adjusted free cash flow* in six of the last seven quarters
- Retail net additions of 95,000
- Postpaid net additions for the fifth consecutive quarter
- Prepaid net additions in the Boost brand for the seventh consecutive quarter
- Most improved network among national carriers based on average download speeds
- Further improvement expected with nationwide deployment of LTE Advanced features that offer up to two times faster speeds than before
- Strong progress on digitalization initiatives
- Postpaid gross additions in digital channels increased nearly 60 percent year-over-year
Sprint Corporation (NYSE: S) today reported year-over-year growth in wireless service revenue for the first time in nearly five years and positive adjusted free cash flow* for the sixth time in the last seven quarters as part of results for the second quarter of fiscal year 2018. The company also announced an increase to its fiscal year 2018 adjusted EBITDA* outlook.
“Sprint reached an important milestone this quarter by returning to year-over-year growth in wireless service revenue two quarters earlier than promised,” said Sprint CEO Michel Combes. “Our strategy of balancing growth and profitability while we increase network investments and add digital capabilities continues to drive solid financial results.”
Wireless Service Revenue Inflection Contributes to Improved Profitability
One quarter after reporting sequential growth, Sprint reported year-over-year growth in wireless service revenue for the first time in nearly five years, when excluding the impact of the new revenue recognition standard. Five consecutive quarters of postpaid net additions and seven consecutive quarters of prepaid net additions within the Boost brand, along with stabilizing ARPU, have contributed to improved revenue trends in the business.
- Postpaid service revenue grew sequentially for the second consecutive quarter.
- Prepaid service revenue grew year-over-year for the fourth consecutive quarter.
Sprint reported its fourth consecutive quarter of net income, its 11th consecutive quarter of operating income, and its highest fiscal second quarter adjusted EBITDA* in 12 years, all excluding the positive impact of the new revenue recognition standard. The new revenue recognition standard had a positive impact of $178 million on reported net income and $225 million on reported operating income and adjusted EBITDA* in the quarter.
Sprint continued to make progress on its multi-year plan to improve its cost structure. Excluding the impact of the new revenue recognition standard and merger costs, the company reported approximately $200 million of combined year-over-year reductions in cost of services and selling, general and administrative expenses in the first half of fiscal 2018. For the full fiscal year, the company expects to deliver gross reductions of more than $1 billion for the fifth consecutive year, with net reductions of less than $500 million after reinvestments.
|(Millions, except per share data)||Fiscal 2Q18||Fiscal 2Q17||Change|
|Net income (loss)||$196||($48)||$244|
|Basic income (loss) per share||$0.05||($0.01)||$0.06|
|Net cash provided by operating activities||$2,927||$2,802||$125|
|Adjusted free cash flow*||$525||$420||$105|
New Premium Option Joins the Best Lineup of Unlimited Plans
Sprint expanded its portfolio of unlimited data, talk and text plans this quarter by introducing Unlimited Premium, a VIP platinum-style wireless plan tailored for the customer who wants it all. The company also recently launched a selection of unlimited plans for customers who want value, a great network and unlimited data, including the Unlimited Plus, Unlimited Basic, Unlimited Military, and Unlimited 55+ plans. All these plans are part of the company’s “Unlimited for All” initiative to design plans so customers can select the best choice for them.
Increased Network Investments Driving a Better Experience
Sprint’s quarterly network investments, or cash capital expenditures excluding leased devices, nearly doubled year-over-year as the company made continued progress on executing its Next-Gen Network plan.
- Sprint completed thousands of tri-band upgrades and now has 2.5 GHz spectrum deployed on 70 percent of its macro sites.
- Sprint added thousands of new outdoor small cells and currently has 21,000 deployed including both mini macros and strand mounts.
- Sprint continued commercial deployment of Massive MIMO radios, which increase the speed and capacity of the LTE network and, with a software upgrade, will provide mobile 5G service launching in the first half of 2019.
These deployments are contributing to Sprint providing customers with a better network experience, as seen in Speedtest Intelligence data from Ookla.
- Best-ever showing with the fastest average download speed in 123 cities, including Seattle, Pittsburgh, Denver, and Honolulu.1
- Most improved network among national carriers with national average download speeds up 31.5 percent year-over-year.2
The company has reached nationwide deployment with LTE Advanced features such as 256 QAM, 4X4 MIMO, and two- and three-channel carrier aggregation, a milestone on the road to 5G. These enhancements are expected to deliver up to two times faster speeds than Sprint 4G LTE on capable devices.
Becoming a Digital-First Company
Sprint is leading the U.S. telecommunications industry in leveraging digital capabilities, including boosting sales in digital channels, leveraging artificial intelligence to improve customer care interactions, and utilizing deep dive analytics to identify customer issues.
- Postpaid gross additions in digital channels increased nearly 60 percent year-over-year.
- Nearly 20 percent of postpaid upgrades were in digital channels in the quarter.
- More than 25 percent of all Sprint customer care chats are now performed by virtual agents using artificial intelligence.
Fiscal Year 2018 Outlook
- Due to strong year-to-date performance, the company is increasing its expectation for adjusted EBITDA* to a range of $12.4 billion to $12.7 billion. The previous expectation was $12.0 billion to $12.5 billion.
- Excluding the impact of the new revenue recognition standard, the company is also increasing its expectation for adjusted EBITDA* to a range of $11.7 billion to $12.0 billion. The previous expectation was $11.3 billion to $11.8 billion.
- The company expects cash capital expenditures excluding leased devices to be $5.0 billion to $5.5 billion. The previous expectation was $5.0 billion to $6.0 billion. (…more)