Verizon Communications NYSE: VZ executives pointed to improving customer retention, lower acquisition costs, and a shift toward “healthier” growth as key drivers of first-quarter 2026 results, while also raising guidance for adjusted earnings per share growth and tightening expectations for postpaid phone additions.
Quarterly performance included revenue growth and improving subscriber trends
CEO Dan Schulman said Verizon’s first-quarter results show its turnaround “is not only progressing, it is gaining momentum,” following what he described as the company’s strongest quarter of mobility and broadband net adds in six years to close 2025.
Total revenue grew 2.9% year-over-year to $34.4 billion, Schulman said. He noted that reported mobility and broadband service revenue growth was below the company’s annual guided range due in part to impacts from a network outage in January, including customer credits that he said created a one-time 80 basis point pressure on wireless service revenues.
Schulman said March mobility and broadband service revenue growth was “in the middle of our guidance range,” with consumer wireless service revenue “approximately flat” year-over-year. He added that Verizon expects first-quarter mobility and broadband service revenues to be the “low point” of 2026 and expressed confidence the company will still meet its full-year 2% to 3% mobility and broadband service revenue growth guidance.
Positive postpaid phone net adds in Q1 for the first time in 13 years
Verizon reported 55,000 postpaid phone net adds for the quarter. Schulman said this was an improvement of more than 340,000 compared with the first quarter a year ago and marked the first time in 13 years the company posted positive postpaid phone net adds in the first quarter.
CFO Tony Skiadas said the company generated positive first-quarter total postpaid phone net additions “for the first time since 2013,” and said both consumer and business segments improved. Skiadas said consumer postpaid phone net losses were 35,000, representing a 321,000 improvement year-over-year, which he attributed to a higher mix of “new-to-Verizon” gross adds.
Beyond postpaid, Skiadas said Verizon grew its prepaid customer base for the seventh consecutive quarter, delivering 115,000 net adds driven by Visible and Total Wireless.
On broadband, Skiadas said Verizon delivered 341,000 broadband net adds, including 214,000 fixed wireless access (FWA) net adds and 127,000 fiber net adds, bringing broadband subscribers to about 16.8 million.
Churn improved while acquisition and retention costs fell
Management emphasized churn and unit economics as central to the company’s strategy shift away from heavy promotions. Schulman said consumer postpaid phone churn was 90 basis points in the quarter, improving 5 basis points sequentially, and continued to improve through the quarter.
He added that in March, consumer postpaid phone churn improved to “below 85 basis points,” which he said reversed multi-year upward churn pressure. Skiadas reported total postpaid phone churn of 0.97% for the quarter and consumer postpaid phone churn of 0.90%, each down 5 basis points sequentially.
Schulman also highlighted a steep reduction in acquisition and retention spending. He said cost of acquisition and retention in March fell approximately 35% relative to the end of the fourth quarter, as Verizon moved away from being “predominantly reliant on expensive promotions.” He tied the reduction to improved customer experience efforts and a greater focus on customer lifetime value.
In response to questions about upgrades and device subsidies, Schulman said the company is moving away from using free handsets as a default retention tool, describing a more tailored approach that uses micro-segmentation to match offers to customer needs. Skiadas said Verizon absorbed about 6% higher upgrade volumes year-over-year in the quarter, but said the growth rate in upgrades has slowed in recent months and into the second quarter.
Profitability, cash flow, and capital allocation
Adjusted EPS was $1.28, up 7.6% year-over-year, which Schulman called Verizon’s “highest adjusted EPS growth rate in over four years.” Skiadas said the company delivered that result despite incremental depreciation and interest expense tied to the Frontier acquisition.
Verizon reported consolidated adjusted EBITDA of $13.4 billion, up 6.7% year-over-year, with an adjusted EBITDA margin of 38.9% that expanded 140 basis points. Skiadas described this as Verizon’s “highest ever reported adjusted EBITDA performance.”
Cash flow from operations was $8.0 billion, Skiadas said, even after about $1.1 billion in severance payments tied to restructuring efforts, plus Frontier integration costs and higher gross add volumes. Capital expenditures were $4.2 billion in the quarter, and Verizon reiterated full-year CapEx guidance of $16.0 billion to $16.5 billion.
Free cash flow was about $3.8 billion in the quarter, up 4% year-over-year. Verizon reiterated that it expects free cash flow to ramp through the year and said it remains on track for full-year free cash flow of $21.5 billion or more.
On shareholder returns, Skiadas said Verizon declared a $0.07 annualized dividend increase in January, a 2.5% increase, marking the company’s 20th consecutive year of dividend increases. He also said Verizon completed $2.5 billion in share repurchases during the first quarter, describing the buyback program as “off to a strong start.” When asked about increasing buybacks beyond prior commentary of at least $3 billion, Skiadas said the $3 billion plan is “appropriate at this time,” while noting the company could do more if it generates excess cash while maintaining its leverage commitments and other priorities.
Frontier integration and transformation initiatives underpin raised EPS outlook
Verizon’s first-quarter results include Frontier Communications’ financial and operating results beginning Jan. 20, 2026, the date the acquisition closed, according to investor relations chief Colleen Ostrowski. Schulman said Frontier integration is on track and highlighted a focus on convergence and achieving “more than $1 billion of run rate operating cost synergies by 2028.” Skiadas reiterated that timeline and said Verizon expects to repay “substantially all” of Frontier’s debt by the end of the year, after paying down about half since closing. Net unsecured debt to consolidated adjusted EBITDA ended the quarter at about 2.6x, and Verizon reiterated its target net unsecured leverage ratio of 2.0x to 2.25x in the 2027 timeframe.
Schulman described a broad transformation program organized around 10 major workstreams, including efforts to become “AI-first,” reduce customer friction, simplify products, and drive operating efficiency. He said Verizon is progressing toward an operating expense savings target of $5 billion in 2026.
In the Q&A, Schulman detailed AI initiatives intended to improve operational efficiency and customer experience, including what he described as deploying AI within network operations and testing AI-enabled voice agents in customer service. He also described efforts to build an AI technology stack and said Verizon is working with partners including Google and Anthropic.
Based on first-quarter performance and “leading indicators,” Verizon raised its adjusted EPS growth outlook to 5% to 6% from a prior range of 4% to 5%, Schulman said. Verizon also updated expectations for postpaid phone net adds to be in the upper half of its previously stated 750,000 to 1 million range. The company reaffirmed the rest of its 2026 outlook, including mobility and broadband service revenue growth of 2% to 3% and free cash flow growth of about 7% or more versus last year.
About Verizon Communications NYSE: VZ
Verizon Communications Inc NYSE: VZ is a major U.S.-based telecommunications company that provides a broad range of communications and information services. Its operations span consumer and business markets, with core offerings that include wireless voice and data services, fixed-line broadband and fiber-optic services, and enterprise networking solutions. Verizon is headquartered in New York City and operates a nationwide wireless network that supports consumer subscribers as well as business and government customers.
The company's consumer products include mobile phone plans, unlimited data services, and Fios, its branded fiber-optic internet, television and voice service for homes and small businesses.
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