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    VZ
    Earnings call· Dec 2025(Q4 FY25)

    VERIZON COMMUNICATIONS INC VZ

    Jan 30, 2026 Source

    Executive summary

    Verizon Q4 FY25 — Strong Net Adds and Turnaround Strategy Underway

    Verizon is undergoing a significant transformation, focusing on customer obsession, efficiency, and sustainable growth. The company aims to move away from short-term revenue gains from empty price increases, instead prioritizing value-based pricing, convergence, and an AI-first approach to drive long-term shareholder value. The Q4 FY25 results show initial momentum, with strong net additions across mobility and broadband, setting a baseline for an accelerated trajectory in FY26.

    Highlights

    5

    • Achieved over 1 million mobility and broadband net adds in Q4 FY25, the highest quarterly volume in 6 years.

    • Reported 616,000 postpaid phone net adds in Q4 FY25, the best quarter in 6 years, with 551,000 from consumer.

    • Delivered $50 billion in adjusted EBITDA for FY25, an increase of 2.5% from the prior year.

    • Generated $20.1 billion in free cash flow for FY25, anticipated to be industry-leading.

    • Targeting $5 billion in OpEx savings for FY26, with a substantial portion from headcount reductions and efficiencies.

    Concerns

    5

    • Experienced a network outage earlier in the month, failing to meet customer expectations.

    • Postpaid phone churn remained elevated in Q4 FY25 due to prior pricing actions and competition.

    • Public sector wireless volumes were impacted by residual disconnects from government efficiency efforts and a federal government shutdown.

    • Wireless service revenue for FY26 is expected to be approximately flat, absorbing promotional amortization and lapping prior year price increases.

    • Frontier acquisition is expected to add $1 billion in interest expense and $1.5 billion in D&A in FY26, impacting the P&L.

    Guidance & targets

    14
    CategoryTargetConfidence
    Postpaid phone net adds
    750,000 to 1 million
    high materiality
    High
    Mobility and broadband service revenue growth
    2% to 3%
    high materiality
    High
    Wireless service revenue growth
    approximately flat
    high materiality
    High
    Adjusted EPS
    $4.90 to $4.95
    high materiality
    High
    Adjusted EBITDA growth
    faster rate than adjusted EPS
    medium materiality
    High
    Capital expenditure (CapEx)
    $16 billion to $16.5 billion
    high materiality
    High
    Free cash flow (FCF)
    $21.5 billion or more
    high materiality
    High
    Net unsecured leverage target
    2.0 to 2.25x
    high materiality
    High
    Annualized dividend increase
    $0.07
    high materiality
    High
    Share repurchase authorization
    $25 billion
    high materiality
    High
    Fiber passings target
    40 million to 50 million
    high materiality
    High
    Fiber passings added
    at least 2 million
    medium materiality
    High
    Operating expense (OpEx) savings
    $5 billion
    high materiality
    High
    Frontier run rate operating cost synergies
    over $1 billion
    medium materiality
    High

    Segment performance

    1
    SegmentRevenueYoYQoQMargin
    Frontier
    Frontier delivered exceptional performance in Q4 FY25, with fiber net additions representing a 29% increase over the prior year, supported by strong operational pace.
    Fiber net additions: 125,000
    		—29%——

    Operational metrics

    25
    Operating expense (OpEx) savings
    $5 billion
    FY26

    Identified as an in-year war chest to be reinvested for growth and loyalty, with ongoing efficiency efforts expected beyond 2026.

    Workforce reduction
    13,000
    Q4 FY25

    Part of aggressive actions to rightsize the organization, remove underperformance, and eliminate redundant structures.

    C-Band build-out completion
    90%
    as of Q4 FY25

    Reflects progress on growth initiatives, with remaining additions mostly on small cells requiring lower CapEx.

    Net unsecured debt
    $110.1 billion$3.6 billion improvement year-over-year
    end of FY25

    Meaningful reductions throughout the year, prior to the Frontier closing.

    Discretionary pension contributions
    $1.3 billion
    FY25

    Contributed to strengthening the balance sheet.

    Frontier debt paid down
    $5.7 billion
    since Jan 20, 2026

    Paid down quickly after closing the acquisition, leveraging Verizon's balance sheet strength.

    Frontier fiber passings deployed
    1.3 million
    FY25

    Reflects strong operational pace by Frontier prior to acquisition.

    Total broadband connections
    over 16.3 million
    end of FY25

    Combined total from Frontier, FWA, and Fios, reflecting significant progress in broadband platforms.

    Total wireless stores
    over 2,000
    end of FY25

    Reflects strong performance and momentum in key prepaid brands.

    Postpaid phone net adds
    616,000best net add quarter in 6 years
    Q4 FY25

    Driven by strong demand and effective execution of offers during the holiday season.

    Prepaid net adds
    109,000sixth consecutive quarter of positive customer growth
    Q4 FY25

    Continued share taking in core prepaid with strong performance from Visible and Total Wireless brands.

    Broadband net adds
    372,000highest of the year
    Q4 FY25

    Reflects strong customer demand across both fixed wireless access and fiber.

    FWA net adds
    319,000quarter-over-quarter improvement
    Q4 FY25

    Driven by the Consumer segment and innovation/expansion of the product offering.

    Fios Internet net adds
    67,000highest Q4 net additions since 2020
    Q4 FY25

    Fios continues to be a gold standard for broadband connectivity.

    Wireless service revenue growth
    2%
    FY25

    Full year growth, with Q4 performance reflecting increased emphasis on disciplined volume-based growth.

    Consolidated adjusted EBITDA
    $11.9 billion
    Q4 FY25

    Strong performance contributing to full year results.

    Consolidated adjusted EBITDA
    $50 billion2.5% from prior year
    FY25

    Within guided range and expected to be industry-leading.

    Adjusted EPS
    $1.09
    Q4 FY25

    Strong quarterly performance contributing to full year results.

    Adjusted EPS
    $4.712.6% from prior year
    FY25

    Growth driven primarily by strength in adjusted EBITDA.

    Capital expenditure (CapEx)
    $17 billion
    FY25

    Delivered on all growth initiatives across C-Band and Fios builds, with efficiencies found.

    Frontier acquisition interest expense
    $1 billion
    FY26

    Expected impact on P&L in FY26 due to the acquisition.

    Frontier acquisition depreciation and amortization
    $1.5 billion
    FY26

    Expected impact on P&L in FY26 due to the asset base acquired.

    Revenue pressure from lapping price increases
    180 basis points
    FY26

    Headwind on revenues for FY26 due to not repeating prior year price increases.

    Churn impact per basis point
    90,000
    Annual

    Quantification of the impact of churn on net adds, highlighting the opportunity for churn reduction.

    Legacy business margin loss
    $1 billion to $1.5 billion
    Annual

    Losses from non-core areas that the company intends to sunset, retire, or divest.

    Industry KPIs

    5
    MetricValueDetails
    Postpaid phone churnelevated
    Postpaid phone net adds616,000net adds
    Broadband fwa net adds split372,000net adds
    Share buyback capital returned$3 billionUSD
    Net debt EBITDA deleveraging path2.2xx

    Product announcements

    1
    ProductTypeDetails
    New value propositionlaunch

    Deals & partnerships

    4
    FrontierAcquisition of Frontier's fiber assets and operations.

    The acquisition closed, bringing Verizon's total fiber passings to over 30 million. It creates significant cross-sell opportunities for wireless services in Frontier markets. Integration is underway to realize synergies from network, third-party contracts, and go-to-market savings.

    Comcast and CharterComprehensive long-term MVNO agreement.long-term

    Verizon completed a comprehensive long-term agreement with Comcast and Charter to continue their partnership, which is described as being on very solid financial, operational, and strategic footing.

    TillmanPartnership for fiber build-out.

    The Tillman partnership is mentioned as a way to continue the fiber build-out and scale efficiently.

    StarryAcquisition to help with MDUs (Multi-Dwelling Units).

    Acquired Starry to assist with MDUs as part of the fiber expansion strategy.

    Risks & headwinds

    6
    Network outageearly January 2026

    impacted customers earlier this month

    Mitigation: Committed to relentlessly working to deliver expected service quality; technicians, fiber crews, and retail teams battled winter storm to maintain connectivity.

    Elevated postpaid phone churnQ4 FY25

    remained elevated in Q4 FY25

    Mitigation: Investment in customer experience, increased convergence opportunities, and avoiding empty price increases are expected to benefit retention in coming quarters.

    Public sector disconnectsQ4 FY25

    impacted public sector results in Q4 FY25

    Mitigation: Vast majority of related disconnects are behind, expecting further improvements in public sector wireless volumes across H1 FY26.

    Promotional amortization pressureFY26

    ongoing

    Mitigation: Growth from FWA, perks, premium mix, and prepaid are expected to help offset this pressure.

    Lapping prior year price increasesFY26

    approximately 180 basis points of pressure on revenues

    Mitigation: Focus on volume-based growth and sustainable revenue streams; this headwind is expected to dissipate by FY27.

    Legacy business margin lossongoing

    $1 billion to $1.5 billion annually

    Mitigation: Sunset, retire, or divest non-core assets and areas where the company is losing money.

    What to watch in Q1 FY26

    5

    New value proposition impact

    H1 FY26
    CurrentIn fine-tuning stage, positive feedback from market research
    TargetLaunch in H1 FY26, observe impact on volumes and financials

    Why it matters

    This new value proposition is central to Verizon's turnaround strategy and its ability to drive sustainable subscriber growth and financial performance without relying on 'empty price increases'.

    Finally, we are targeting the launch of our new value proposition in the first half of this year. We are in deep market research with a very sophisticated conjoint analysis that is providing us with detailed customer feedback, projected market dynamics and associated financial and operational metrics.

    Q&A highlights

    5

    What investments are needed to drive the strong postpaid phone outlook for 2026, and will improvements be more from churn reduction or marketing/promotions for gross adds?

    Management expects a combination of factors, emphasizing that churn reduction is a significant opportunity. They will invest in customer experience, leverage convergence opportunities (Frontier, FWA), and be appropriately aggressive in the market without relying on empty price increases or excessive promotions. Reducing churn by 5 bps alone would achieve half the target.

    “If we reduce churn by 5 bps, we are already halfway to our target. And think about some of the things that we're doing, like our churn is driven by price increases without corresponding value. And we've already said in our remarks that we're not going to do that.”

    asked by Michael Ng · answered by Daniel Schulman

    2 min read6 chapters

    Detailed Narrative

    01

    Turnaround Strategy and Cultural Shift

    Verizon is embarking on a significant turnaround, driven by bold actions to become a leaner, more efficient, and agile organization. The company is focused on transforming its culture to prioritize customer delight and trust, moving away from ceding market share to competitors. This involves aggressively removing underperformance, eliminating redundant structures, and cutting resources not focused on priorities, aiming for a 'play to win' mentality.

    02

    Cost Transformation and OpEx Savings

    A major component of the transformation is a rigorous cost structure review, targeting $5 billion in OpEx savings for FY26. These savings will come from headcount reductions (13,000 employees in Q4 FY25), marketing efficiencies, real estate rationalization, and contract renegotiations. The company plans to reinvest a portion of these savings to drive higher quality revenue and improve customer experience, with further efficiencies expected in 2027 and 2028 through complexity reduction and automation.

    03

    Frontier Acquisition and Convergence Opportunities

    The recent closing of the Frontier acquisition significantly expands Verizon's fiber footprint to over 30 million passings. This creates a substantial cross-sell opportunity, particularly for wireless services in Frontier markets where Verizon is currently underpenetrated. Management expects to realize over $1 billion in run rate operating cost synergies by 2028 from the integration, double the initial estimate, and sees convergence as a key driver for subscriber growth and churn reduction.

    04

    New Value Proposition and AI-First Approach

    Verizon plans to launch a new value proposition in the first half of FY26, informed by extensive market research and data analytics. The company is committed to being an 'AI-first' organization, deploying AI at scale to optimize operations, reshape customer experience, simplify offers, personalize interactions, and reduce churn through smart marketing and predictive models. This strategy aims to redefine value propositions and deliver hyper-personalized experiences.

    05

    Q4 FY25 Performance Highlights

    The fourth quarter of FY25 showed initial glimmers of the transformation's impact, with Verizon achieving over 1 million mobility and broadband net adds, the highest quarterly volume in six years. This included 616,000 postpaid phone net adds, the best in six years, with 551,000 from the consumer segment. The company also delivered on its full-year FY25 financial guidance, including $50 billion in adjusted EBITDA and $20.1 billion in free cash flow.

    06

    Capital Allocation Priorities

    Verizon's capital allocation strategy remains focused on four key priorities: investing in the business (with FY26 CapEx guided at $16-16.5 billion), maintaining an ironclad commitment to its dividend (with a $0.07 annualized increase declared), maintaining a strong balance sheet (targeting 2.0-2.25x net unsecured leverage by 2027), and returning cash to shareholders (with a new $25 billion share repurchase authorization over three years, including at least $3 billion in FY26).

    AI-generated summary of the company’s earnings call. Not investment advice.