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Segment Information | 3 Months Ended
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Mar. 31, 2025
Segment Reporting [Abstract] |
Segment Information | Note 9—Segment Information Our business is managed based on customer-facing sales channels to align with how we support our customers. Our chief operating decision maker ("CODM"), who is our CEO, makes decisions and assesses the performance of the Company reviewing two segments: Business and Mass Markets. Our reportable segments have not been aggregated. Under our Business segment we provide products and services to meet the needs of our enterprise and wholesale customers under five distinct sales channels: Large Enterprise, Mid-Market Enterprise, Public Sector, Wholesale, and International and Other. For Business segment revenue, we report the following product categories: Grow, Nurture, Harvest, and Other, in each case through the sales channels outlined above. Under our Mass Markets Segment, we provide products and services to residential and small business customers. We report the following product categories: Fiber Broadband, Other Broadband, and Voice and Other. See detailed descriptions of these product and service categories in Note 3—Revenue Recognition. As described in more detail below, our segments are managed based on the direct costs of providing services to their customers and directly associated headcount and non-headcount operating expenses. Shared costs are managed separately and included in "other unallocated expense" in the table included below under the heading "— Revenue and Expenses". As referenced above, we reclassified certain prior period amounts to conform to the current period presentation. See Note 1— Background for additional detail on these changes. The CODM uses adjusted EBITDA as the key indicator in assessing performance and allocating resources for both the Business segment and Mass Markets segment. The following tables summarize our segment results for the three months ended March 31, 2025 and 2024, based on the segment categorization we were operating under at March 31, 2025.
|  |  | Three Months Ended March 31, 2025
|  |  |  |  | Business |  | Mass Markets
|  |  |  |  | (Dollars in millions)
Segment revenue |  |  |  |  | $ | 2,524 |  |  | 658 |
Segment expenses |  |  |  |  |  |  |
Cost of services and products |  |  |  |  | 738 |  |  | 14 |
Headcount costs |  |  |  |  | 286 |  |  | 150 |
Non-headcount costs |  |  |  |  | 334 |  |  | 113 |
Total segment expense |  |  |  |  | 1,358 |  |  | 277 |
Total segment adjusted EBITDA |  |  |  |  | $ | 1,166 |  |  | 381 |
|  |  | Three Months Ended March 31, 2024
|  |  |  |  | Business |  | Mass Markets
|  |  |  |  | (Dollars in millions)
Segment revenue |  |  |  |  | $ | 2,591 |  |  | 699 |
Segment expenses |  |  |  |  |  |  |
Cost of services and products |  |  |  |  | 738 |  |  | 17 |
Headcount costs |  |  |  |  | 344 |  |  | 167 |
Non-headcount costs |  |  |  |  | 341 |  |  | 132 |
Total segment expense |  |  |  |  | 1,423 |  |  | 316 |
Total segment adjusted EBITDA |  |  |  |  | $ | 1,168 |  |  | 383 |
Revenue and Expenses Our segment revenue includes all revenue from our two segments as described in more detail above. Our segment revenue is based upon each customer's classification. We report our segment revenue based upon all services provided to that segment's customers. Our segment expenses include (i) specific cost of service expenses incurred as a direct result of providing services and products to segment customers, (ii) headcount costs, which primarily includes salaries, commissions, and group insurance, and (iii) non-headcount costs, which primarily includes legal and other professional fees, marketing and advertising expenses, other network related expenses, and external commissions. We have not allocated assets or debt to specific segments. The following items are excluded from our segment results, because they are centrally managed and not monitored by or reported to our chief operating decision maker by segment: •network expenses not incurred as a direct result of providing services and products to segment customers and centrally managed expenses such as Finance, Human Resources, Legal, Marketing, Product Management, and IT, all of which are reported as "other unallocated expense" in the table below; •depreciation and amortization expense; •goodwill or other impairments; •interest expense; •stock-based compensation; •other income and expense items; and •income tax expense. The following table reconciles total segment adjusted EBITDA to net (loss) income for the three months ended March 31, 2025 and 2024:
|  |  | Three Months Ended March 31,
|  |  |  |  | 2025 |  | 2024
|  |  |  |  | (Dollars in millions)
Total segment adjusted EBITDA |  |  |  |  | $ | 1,547 |  |  | 1,551 |
Depreciation and amortization |  |  |  |  | (713) |  |  | (748) |
Other unallocated expense |  |  |  |  | (717) |  |  | (744) |
Stock-based compensation expense |  |  |  |  | (10) |  |  | (14) |
Operating income |  |  |  |  | 107 |  |  | 45 |
Total other (expense) income, net |  |  |  |  | (352) |  |  | 57 |
(Loss) income before taxes |  |  |  |  | (245) |  |  | 102 |
Income tax (benefit) expense |  |  |  |  | (44) |  |  | 45 |
Net (loss) income |  |  |  |  | $ | (201) |  |  | 57 |

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- Definition The entire disclosure for reporting segments including data and tables. 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