Frontier Communi Stock Price, News & Analysis

Frontier Communications Parent, Inc. (NASDAQ: FYBR), commonly referred to as Frontier, is a communications and technology provider that focuses on broadband connectivity. According to company disclosures, Frontier offers broadband services and provides voice services, including data-based voice over Internet protocol (VoIP) and unified communications as a service (UCaaS), as well as long-distance and voice messaging services. The company serves both consumer and business customers across its markets.

Frontier describes itself as the largest pure-play fiber provider in the U.S. and states that it is driven by the purpose of “Building Gigabit America®.” In its public communications, the company explains that it delivers high-speed, or “blazing-fast,” broadband connectivity intended to unlock the potential of millions of consumers and businesses. This focus on fiber-based broadband underpins what Frontier refers to as its fiber-first strategy.

Business focus and services

Based on available information, Frontier’s business centers on broadband connectivity delivered over fiber, alongside voice and related communications services. The company notes that it provides:

• Broadband services
• Voice services, including VoIP
• Unified communications as a service (UCaaS)
• Long-distance and voice messaging services

Frontier’s news releases highlight that its revenue mix has been shifting toward fiber-based products, while revenue from copper-based products has been declining. The company reports separate results for its Consumer segment and its Business and Wholesale segment, each of which includes fiber broadband offerings.

Fiber-first strategy and network expansion

Frontier repeatedly emphasizes a fiber-first strategy. In its quarterly updates, the company reports the number of fiber passings (locations passed with fiber) and fiber broadband customers, and it highlights growth in fiber broadband revenue and average revenue per user (ARPU). Frontier has publicly stated that its fiber build has crossed milestones such as reaching more than 8 million locations passed with fiber and that it has added hundreds of thousands of new fiber passings and fiber broadband customers over recent periods, while noting that growth in fiber-based products has been partly offset by declines in copper-based products.

The company presents this fiber buildout as part of its purpose of Building Gigabit America, describing fiber as critical digital infrastructure that supports participation in the digital economy. In its communications, Frontier characterizes fiber broadband as fast and reliable and as a technology capable of meeting customers’ needs.

Customer segments: consumer, business and wholesale

Frontier reports results for two primary customer groupings:

• Consumer – Frontier reports consumer revenue and consumer fiber revenue, including consumer fiber broadband revenue. It discloses metrics such as consumer fiber broadband customer net additions, year-over-year growth in consumer fiber broadband customers, ARPU, and churn.
• Business and Wholesale – Frontier reports business and wholesale revenue and business and wholesale fiber revenue, including business and wholesale fiber broadband customer net additions, ARPU, and churn. The company notes that business and wholesale fiber revenue is driven by data and internet services.

Across these groups, Frontier’s disclosures emphasize growth in fiber broadband customers and fiber broadband revenue, while acknowledging declines in certain legacy services, such as copper-based products and, within consumer fiber revenue, video.

Positioning as a fiber internet provider

In multiple public statements, Frontier describes itself as the largest pure-play fiber internet provider in the U.S. and the largest pure-play fiber provider in the country. The company links this positioning to its fiber network, which it says brings connectivity to millions of homes and businesses. Frontier also notes that it is building what it calls critical digital infrastructure and that it views fiber as the best technology for connecting homes and businesses, citing attributes such as speed and reliability in its communications.

Frontier has also highlighted research it commissioned, together with the Fiber Broadband Association, on the potential economic impact of fiber deployment in the U.S. In describing that study, Frontier states that deploying fiber to households that lack fiber access could increase housing values, household income and jobs, and it uses this to underscore its belief in the broader economic and social benefits of fiber deployment.

Financial reporting and non-GAAP measures

Frontier’s investor communications and SEC filings describe how the company evaluates its performance using both GAAP and non-GAAP financial measures. The company states that it uses measures such as EBITDA, EBITDA margin, Adjusted EBITDA, Adjusted EBITDA margin, operating free cash flow, adjusted operating expenses, and net leverage ratio. Frontier explains that management uses these non-GAAP measures to:

• Assist in analyzing underlying financial performance from period to period
• Analyze and evaluate strategic and operational decisions
• Establish criteria for compensation decisions
• Understand the company’s ability to generate cash flow and plan for capital and operational decisions

The company provides definitions of these non-GAAP metrics, such as defining EBITDA as net income (loss) adjusted for income tax expense (benefit), interest expense, investment and other income (loss), pension settlement costs, reorganization items, and depreciation and amortization. Adjusted EBITDA is defined as EBITDA further adjusted to exclude certain pension and other post-employment benefit expenses, restructuring costs and other charges, stock-based compensation, and certain other non-recurring items. Frontier notes that investors and rating agencies have indicated that these measures are useful in assessing the company’s operations and debt levels, while also acknowledging the limitations of non-GAAP measures.

Capital structure and liquidity disclosures

In its recent results releases, Frontier has provided information about its liquidity, capital expenditures, and net leverage ratio. The company reports total liquidity as consisting of cash balances and available borrowing capacity under its delayed draw term loan facility and revolving credit facility. It also notes that it has no long-term debt maturities prior to a specified year in its disclosures. Frontier defines net leverage ratio as net debt (total debt less cash and cash equivalents and short-term investments) divided by Adjusted EBITDA for the most recent four quarters and states that investors have indicated this measure is useful in evaluating its debt levels.

Pending acquisition by Verizon

Frontier has disclosed that, on September 4, 2024, it entered into a definitive merger agreement with Verizon Communications Inc. for Verizon to acquire Frontier. The company refers to this transaction as the proposed merger or transaction and states that, in light of the pending transaction, it will not be hosting conference calls to review quarterly results or providing a financial outlook. Frontier has also stated that the transaction is expected to close by the first quarter of 2026, subject to required regulatory approvals and the satisfaction or waiver of other conditions described in the merger agreement. The company’s communications include forward-looking statements language noting that there is a risk the merger may not be completed or may be delayed and that various conditions and approvals are required.

Regulatory reporting

Frontier files reports with the U.S. Securities and Exchange Commission (SEC) under Commission File Number 001-11001. For example, the company has filed Current Reports on Form 8-K to furnish press releases announcing quarterly financial results, identifying these under Item 2.02 (Results of Operations and Financial Condition) and Item 9.01 (Financial Statements and Exhibits). These filings state that the attached press releases are furnished rather than filed for purposes of Section 18 of the Securities Exchange Act of 1934.

Risk factors and industry context as described by Frontier

In the forward-looking statements sections of its releases, Frontier outlines factors that could affect future developments and performance. These include, among others, risks related to the proposed merger with Verizon, the company’s indebtedness and debt covenants, economic uncertainty and financial market volatility, its ability to implement its fiber buildout and other initiatives, supply chain and inflationary pressures, competition from various types of communications providers, and changes in funding programs and regulations. These statements are presented by the company as cautionary information regarding uncertainties in its operating environment.

How Frontier describes its role

Across its public communications, Frontier links its identity as the largest pure-play fiber provider in the U.S. with its stated purpose of Building Gigabit America. The company frames its fiber network as digital infrastructure that supports consumers, businesses, and broader economic activity, and it emphasizes growth in fiber broadband customers and fiber broadband revenues as central indicators of its progress.