Verizon Media, Ahead of Spin-Off, Sees Q2 Revenue Bounce Back Over Pre-Pandemic Levels

Verizon Media is getting ready to fly out of the Verizon nest as a private company — and CEO Guru Gowrappan says the digital-media group that encompasses Yahoo and AOL businesses has strengthened its wings for journey.

It’s also getting help from a rebound in digital advertising spend: Verizon Media revenue for the second quarter of 2021 was $2.1 billion. That’s up 50% from the year-ago period, which was hurt by the COVID pandemic, and an increase of 13% from Q2 2019.

“We are executing on the product side and taking share from competitors,” Gowrappan said.

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The Q2 results mark the third consecutive quarter of double-digit growth for the media business, and represents sequential acceleration in year-on-year growth. Verizon Media isn’t disclosing any profit metrics, but Gowrappan, pointing to the division’s top-line growth, said, “It’s not empty-calorie revenue.”

In May, Verizon announced a deal with private-equity firm Apollo Global Management to sell Verizon Media for $5 billion. Verizon will retain a 10% stake in the company, which will be renamed “Yahoo.” The transaction is expected to close in the second half of 2021.

A big driver of Verizon Media’s Q2 bump in revenue: The Demand Side Platform (DSP) for advertising turned in 152% year-over-year growth and was up 138% over the second quarter of 2019.

Verizon Media saw a record number of advertisers spending at least $1 million in Q2, Gowrappan said. He also cited its connected-TV ads business, which grew 145% year over year, helped by its strategic partnership with Vizio, under which Verizon Media gains demand-side platform access to Vizio’s Inscape viewership data from more than 18 million smart TVs.

Gowrappan also cited strong growth for Verizon Media’s consumer commerce business, which boosted revenue 124% year over year. Its premium subscriptions grew by 45% driven by its Yahoo Plus family of products, which include Yahoo Plus Protect, Yahoo Plus Secure and Finance Plus (each of which more than doubled revenue year over year).

With the Apollo deal, Gowrappan said, “The excitement is about getting more investment in key growth areas… Being a standalone company, we can prioritize dollars in our world without needing to do that at the Verizon corporate level.”

Currently, Verizon Media has about 10,000 employees globally. As Yahoo, the company will be dual-headquartered in New York and the San Francisco Bay Area.

Overall, Verizon beat Wall Street estimates on the top and bottom lines. The telco reported $33.8 billion in Q2 consolidated revenue, up 10.9% year-over-year, driven by wireless revenue growth and an 11.2% increase in consumer revenue. The telco reported earnings per share of $1.40, up from $1.13 in the year-ago quarter.

Verizon’s Fios TV shed 62,000 net subscribers in Q2, to stand at 3.71 million. The company gained 92,000 consumer Fios Internet customers, to 6.39 million; according to Verizon, the trailing 12-month total Fios Internet net additions are the highest they’ve been since 2015.

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