What are expectations for upgrade activity and how is Verizon balancing lower device subsidies with driving gross adds?

Dan Schulman explained that improvements in acquisition and retention costs are structural, driven by micro-segmentation and understanding customer needs beyond just offering free handsets. He gave an example of solving service issues with a femto cell instead of a free phone. Tony Skiadas added that the strong cash generation provides optionality, and the rate of growth in upgrades has slowed due to targeted retention offers and customer choice to keep phones longer. “Not every retention is going to be a free handset. In fact, quite the opposite. I mean, I think our industry has been too dependent on free handsets being the solution for everything.”

How much of the $5 billion OpEx savings has been realized, and what are the expectations for fixed wireless and fiber broadband trends?

Tony Skiadas detailed cost savings from network decommissioning, advertising efficiencies, targeted retention, and workforce reductions. He highlighted future opportunities in customer experience, IT rationalization, and Frontier integration synergies. Dan Schulman stated that Verizon intends to aggressively drive broadband, with a potential mix shift towards fiber due to its inherent advantages and positive owner's economics, while still leveraging FWA capacity. He noted Q1 was seasonally slow for broadband but expects acceleration. “Look, fiber has inherent advantages over FWA, and we're going to prioritize it where we have coverage. And therefore, you should expect a mix shift from where we've previously been.”

Is the $8M-$9M FWA subs by 2028 target still valid, and what are the expectations for buybacks in 2026 given the strong Q1?

Dan Schulman affirmed the aggressive broadband drive, stating that the FWA target should not be adjusted, though there might be a mix shift towards fiber. Tony Skiadas reiterated the capital allocation framework, confirming the dividend, debt repayment (half of Frontier's debt already paid), and the share buyback program. He stated that the plan of "at least $3 billion" for buybacks is appropriate for now, despite the $2.5 billion in Q1, but acknowledged the ability to do more if excess cash flow allows. “No, I don't think you should really adjust any of your thoughts around that. We're going to drive quite aggressively on the broadband front. Again, there may be more of a shift to fiber than FWA.”

Verizon (VZ) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Communication Services· Apr 27, 2026

Source: earnings call transcript

Executive summary

Verizon Q1 FY26 — Strong Momentum with Postpaid Phone Net Adds and Raised EPS Outlook

Verizon delivered a strong Q1 FY26, marking a significant turnaround with positive postpaid phone net adds for the first time in 13 years, driven by a customer-centric approach and improved churn. The company is executing a comprehensive transformation program, leveraging AI to enhance efficiency and customer satisfaction, which is translating into better unit economics and stronger cash generation. Management raised its full-year adjusted EPS growth and postpaid phone net adds outlook, signaling confidence in its disciplined growth strategy.

Highlights

Delivered 55,000 postpaid phone net adds, a 340,000+ improvement year-over-year and the first positive Q1 in 13 years.
Achieved 0.90% consumer postpaid phone churn, a sequential improvement of 5 basis points from Q4 and below 85 basis points by quarter-end.
Reduced cost of acquisition and retention by approximately 35% relative to Q4, while still driving positive net adds.
Reported adjusted EPS of $1.28, up 7.6% year-over-year, the highest growth rate in over 4 years.
Generated free cash flow of $3.8 billion, up 4% year-over-year, representing a strong start to the year.

Concerns

Wireless service revenue was down 1% year-over-year, impacted by 80 basis points from customer credits due to a network outage.
Mobility and broadband service revenue grew 1.6% year-over-year, below the annual guided range of 2-3%.
Net unsecured debt to consolidated adjusted EBITDA ratio increased to approximately 2.6x due to the Frontier acquisition.

Guidance & targets

Category	Target	Timeline	Confidence
Mobility and broadband service revenue growth	2% to 3% high materiality	Full-year 2026 · FY26	High
Adjusted EPS growth	5% to 6% high materiality	Full-year 2026 · FY26	High
Postpaid phone net adds	upper half of our $750,000 to $1 million range high materiality	Full-year 2026 · FY26	High
Free cash flow growth	approximately 7% or more high materiality	Full-year 2026 · FY26	High
Full year free cash flow	$21.5 billion or more high materiality	Full-year 2026 · FY26	High
Capital expenditures	$16 billion to $16.5 billion medium materiality	Full-year 2026 · FY26	High
Fiber passings	more than 32 million medium materiality	End of 2026 · FY26	High
Frontier operating cost synergies	over $1 billion medium materiality	Run rate by 2028 · FY28	High
Operating expense savings target	$5 billion high materiality	Full-year 2026 · FY26	High
Net unsecured leverage ratio	2.0 to 2.25x high materiality	2027 time frame · CY27	High
Frontier debt repayment	substantially all medium materiality	End of 2026 · FY26	High
Share buyback program	at least $3 billion high materiality	Full-year 2026 · FY26	Medium

VZ operating KPIs by quarter

VZ operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Mar 2025 Q1 FY25	Jun 2025 Q2 FY25	Sep 2025 Q3 FY25	Dec 2025 Q4 FY25	This call Mar 2026 Q1 FY26	Jun 2026 Q2 FY26	Change vs prior quarter
Paid subscriber net additions Prepaid	137K Our prepaid net adds of 137,000 were the best since the TracFone acquisition and represent a significant year-over-year improvement. Source: earnings call transcript	50K Core prepaid net additions were $50,000 for the quarter an improvement of $62,000 from the prior year period. Source: earnings call transcript	47K Moving to core prepaid, we delivered 47,000 net adds, our fifth consecutive quarter of positive subscriber growth. Source: earnings call transcript	109K Fourth quarter net adds were 109,000, our sixth consecutive quarter of positive customer growth. Source: earnings call transcript	115K We delivered 115,000 net adds, driven by our visible and total wireless brands, demonstrating the continuing strength of our prepaid business and our segmentation approach. Source: earnings call transcript	73K Prepaid net adds were 73,000, our eighth consecutive quarter of positive net adds. Source: earnings call transcript	-36.5%
Paid subscriber net additions Broadband	339K In broadband, we continue to take share and grew our subscriber base with our dual fixed wireless access and fiber strategy, adding 339,000 subscribers in the quarter. Source: earnings call transcript	—	—	372K Fourth quarter net adds were 372,000, our highest of the year, reflecting strong customer demand across both fixed wireless access and fiber. Source: earnings call transcript	341K We continue to take share in the first quarter and delivered 341,000 broadband net adds. Source: earnings call transcript	348K In addition, we added 348,000 broadband net additions, continuing the share taking momentum we have built over the last several quarters. Source: earnings call transcript	+2.1%
Postpaid phone net additions Consumer	—	-51K Consumer postpaid phone net losses totaled $51,000 for the second quarter compared to 109,000 net losses in the prior year period as we benefited from strong gross adds. Source: earnings call transcript	-7,000 However, gross add growth was offset by churn of 0.91%, which resulted in postpaid phone net losses of 7,000 in the quarter. Source: earnings call transcript	551K Importantly, we added 616,000 postpaid phone net adds with 551,000 from consumer, our highest postpaid phone net adds in the last 5 years, all while delivering on our 2025 financial guidance. Source: earnings call transcript	—	—	—
Postpaid phone net additions Verizon Business	67K Verizon Business delivered 67,000 phone net adds, down from 80,000 net adds in the prior year period. Source: earnings call transcript	42K Verizon Business delivered 42,000 phone net adds in the second quarter compared with 135,000 net adds in the prior year period. Source: earnings call transcript	51K Verizon business delivered 51,000 phone net adds. Source: earnings call transcript	—	—	—	+21.4%
Fixed wireless access net additions	—	278K In fixed waterless access, we delivered 278,000 net adds for the quarter, growing the base to more than 5.1 million subscribers. Source: earnings call transcript	261K Fixed Wireless Access net adds were 261,000 for the quarter. Source: earnings call transcript	319K Fixed wireless access net adds were 319,000. Source: earnings call transcript	214K This includes 214,000 fixed wireless access net adds and 127,000 fiber net adds. Source: earnings call transcript	193K Fixed wireless access and fiber delivered net adds of 193,000 and 155,000, respectively, demonstrating our continued success in capturing our broadband opportunity with both technologies. Source: earnings call transcript	-9.8%
Fios internet net additions	45K Fios Internet net adds for the first quarter were 45,000 versus 53,000 in the prior year period. Source: earnings call transcript	32K Fios Internet net adds for the second quarter were 32,000 versus 28,000 in the prior year period. Source: earnings call transcript	61K Fios internet delivered 61,000 net adds, our best quarterly result in 2 years. Source: earnings call transcript	67K Fios Internet delivered 67,000 net adds, our highest fourth quarter net additions since 2020. Source: earnings call transcript	—	—	+9.8%
Postpaid phone net additions	—	—	—	616K Importantly, we added 616,000 postpaid phone net adds with 551,000 from consumer, our highest postpaid phone net adds in the last 5 years, all while delivering on our 2025 financial guidance. Source: earnings call transcript	55K We added 55,000 postpaid phone net adds in the quarter. Source: earnings call transcript	184K In the quarter, we delivered 184,000 postpaid phone net adds, a meaningful step-up from Q1 and an increase of 193,000 from last year. Source: earnings call transcript	+234.5%
Paid subscribers Fixed wireless access	—	5.1M+ In fixed waterless access, we delivered 278,000 net adds for the quarter, growing the base to more than 5.1 million subscribers. Source: earnings call transcript	~5.4M With approximately 5.4 million FWA subscribers, our annualized revenue has surpassed $3 billion and continues to grow. Source: earnings call transcript	—	—	—	—
Paid subscribers Broadband	—	—	13.2M+ Our broadband base is up 1.3 million subscribers from a year ago and is now over 13.2 million subscribers. Source: earnings call transcript	—	~16.8M We now have approximately 16.8 million broadband subscribers. Source: earnings call transcript	17.1M+ Notably, we now have over 17.1 million total broadband subscribers in our base. Source: earnings call transcript	—
Fiber net additions	—	—	—	—	127K This includes 214,000 fixed wireless access net adds and 127,000 fiber net adds. Source: earnings call transcript	155K Fixed wireless access and fiber delivered net adds of 193,000 and 155,000, respectively, demonstrating our continued success in capturing our broadband opportunity with both technologies. Source: earnings call transcript	+22%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Deals & partnerships

Frontier Communications acquisition

Results included in financial and operating results beginning on January 20, 2026, the date the acquisition closed. Integration is on track.

Starry investment

Transaction closed in the first quarter.

Risks & headwinds

Network outage leading to customer credits Q1 FY26

80 basis points reduction in wireless service revenue

Mitigation:Transparent and decisive action, providing immediate customer credits to maintain long-term relationships.

Elevated promotional amortization pressures Q1 FY26, expected to subside

Lapping approximately 180 basis points of pricing impacts from prior year

Mitigation:Maintaining low churn, disciplined cost of acquisition and retention, driving net adds, expecting a stronger revenue profile by end of 2026.

Increased leverage from acquisition Near-term, post-Frontier acquisition

Net unsecured debt to consolidated adjusted EBITDA ratio increased to approximately 2.6x at end of Q1

Mitigation:Paid down about half of Frontier's debt, expect to repay substantially all by year-end, on track to achieve target leverage ratio of 2.0-2.25x in 2027.

Dynamic competitive and macro environment Ongoing

Not quantified

Mitigation:Revised guidance reflects a prudent view, maintaining flexibility and a 'war chest' to react to competitive moves, disciplined transformation agenda.

Q&A highlights

How are accounts and ARPA performing, and what's the outlook given current promotions and pricing?

Dan Schulman stated that Verizon is now customer-centric, focusing on accounts rather than just lines, leading to improved account net adds and higher quality new customers with more lines per account. He noted that the majority of Q1 ARPA decline was due to network outage credits, a one-time event. Tony Skiadas added that new-to-Verizon gross adds are up 150 bps, and they expect ARPA improvements as the year progresses by reducing reliance on expensive promotions.

“A customer-centric approach is driving our progress on both fronts. The net adds we're adding are higher quality than those that are rolling off. Our new accounts are being added with more lines per account or percent of new to Verizon continues to climb, and that's a leading indicator of where our account number is headed next.”

asked by Michael Rollins · answered by Daniel Schulman

2 min read 5 chapters

Detailed narrative

Customer-Centric Transformation

Verizon is undergoing an ambitious company-wide transformation built around 10 major work streams, aiming to become an AI-first company, reduce customer journey friction, and simplify products. This program is changing daily operations, focusing on transparency, simplicity, and genuine value delivery to customers, moving away from blunt price increases and expensive promotions.

The company's commitment to customer value and trust is becoming embedded in its corporate DNA, influencing offer design, customer communication, and internal success metrics.

AI Integration and Impact

The company is rapidly integrating AI into its operations, with a 4-layer tech stack expected to be substantially complete by July. AI is already improving customer satisfaction, with a 1,280 basis point year-over-year improvement in customer SAT scores using voice agents.

It's also increasing software development delivery by over 40% and generating over $200 million in energy savings within the network. Verizon is actively exploring multi-billion dollar revenue opportunities by integrating its fiber and 5G assets with hyperscalers and large enterprises for AI infrastructure, including data center connectivity and support for training and inference.

Broadband Expansion and Convergence

Verizon continues to aggressively expand its broadband footprint, targeting over 32 million fiber passings by year-end, with a medium-term goal of $40 million to $50 million. The Frontier integration is on track to deliver over $1 billion in run-rate operating cost synergies by 2028.

The company sees a significant cross-sell opportunity, with only 20% of its base currently having broadband, and notes that churn is almost 30% less for converged offers, leading to higher customer lifetime value and ARPA. While prioritizing fiber, Verizon will continue to drive Fixed Wireless Access (FWA) leveraging increased network capacity.

Cost Efficiency and Capital Allocation

The company realized substantial savings in advertising, network operating expenses, and workforce-related costs, contributing to its $5 billion OpEx savings target for 2026. These efficiencies are dropping to the bottom line, allowing for reinvestment in customer experience and significant capital returns.

Verizon's capital allocation priorities include investing in network excellence, maintaining its strong dividend (marking the 20th consecutive year of increases), strengthening the balance sheet by reducing debt, and returning additional value to shareholders through stock buybacks.

Network Outage and Customer Response

In Q1, Verizon experienced a network outage in January, which resulted in a one-time pressure of 80 basis points on wireless service revenues due to customer credits. Management emphasized its commitment to doing the right thing for customers and valuing long-term relationships, reacting transparently and decisively to the event.

This approach aligns with the broader strategy of improving customer experience and retention by removing friction and providing value, rather than relying on blunt price increases.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.