Verizon Communications Inc. (VZ) shares jumped over 5% in premarket trading Friday after the telecom giant posted fourth-quarter results that suggest its turnaround efforts might actually be working. And yes, that's the kind of sentence that gets written when expectations have been low enough for long enough.
The headline number: Verizon added 616,000 postpaid phone subscribers in the quarter, up from 504,000 a year ago. That's the best quarterly performance since 2019, which matters because subscriber growth is basically the whole ballgame in the wireless business. You can fiddle with pricing and upsell services all you want, but if people aren't signing up for your phones, you've got a problem.
Revenue came in at $36.40 billion, up 2.0% year-over-year and ahead of the $36.06 billion analysts expected. Adjusted earnings per share hit $1.09, topping the $1.05 consensus. Not bad for a company that's spent the past few years watching AT&T Inc. (T) and T-Mobile US, Inc. (TMUS) eat its lunch.
Broadband Is Having a Moment
Beyond wireless, Verizon's broadband business showed some real momentum. The company added 372,000 broadband subscribers overall, including 319,000 fixed wireless access customers and 67,000 Fios internet additions. Fixed wireless now has over 5.7 million subscribers total.
Here's where timing matters: Verizon closed its acquisition of Frontier on January 20, which pushed total broadband connections past 16.3 million by quarter's end. CEO Dan Schulman called this a "significant milestone," noting that the deal expanded Verizon's fiber footprint to more than 30 million homes and businesses. That's the kind of infrastructure that's supposed to make a difference when everyone else is fighting over the same wireless turf.
Wireless service revenue hit $21.0 billion in the quarter, up 1.1% from last year. Not exactly explosive growth, but it's moving in the right direction.
Consumer Versus Business
The Consumer segment pulled most of the weight here. Total quarterly consumer revenue reached $28.44 billion, up 3.2% year-over-year. Verizon added 551,000 wireless retail postpaid phone subscribers on the consumer side, a big jump from the 367,000 added a year earlier. Consumer wireless service revenue climbed 1.2% to $17.37 billion.
Churn rates stayed relatively healthy: wireless retail postpaid churn came in at 1.21%, while postpaid phone churn was 0.95%. Average revenue per account stood at $147.36, up 1.2% year-over-year. The company also added 109,000 prepaid subscribers, which doesn't hurt.
The Consumer segment EBITDA margin did slip by 100 basis points to 36.5%, but that's partly the cost of being more promotional to win customers back.
Business revenue was less exciting, dropping 1.8% to $7.37 billion. Verizon did manage 11,000 wireless retail postpaid net additions in the segment, including 65,000 postpaid phone adds. Business wireless service revenue inched up 0.5% to $3.59 billion. Churn was higher here—1.64% overall and 1.27% for phones specifically. The Business segment EBITDA margin fell 10 basis points to 22.0%.
The Cash Flow Reality Check
Adjusted EBITDA came in at $11.86 billion, down slightly from $11.93 billion last year. Net income dropped more dramatically to $2.45 billion from $5.11 billion a year ago, though year-ago comparisons can be noisy. Free cash flow landed at $4.37 billion, down from $5.36 billion in the prior-year quarter.
Schulman's Turnaround Playbook
The new CEO isn't messing around. Schulman has pushed aggressive promotions—think free top-tier smartphones with new lines, bundled internet plans with perks like a free Samsung TV—to compete in what's become a brutally competitive market. He's also cut roughly 13,000 jobs and promised a "leaner, faster organization" after Verizon stumbled with price hikes and customer service problems that drove people away.
Schulman said the company has reached "a critical inflection point," which is CEO-speak for "we think the worst is behind us." Whether that's true depends on whether these subscriber gains can stick.
Looking Ahead to 2026
Verizon's 2026 guidance gave investors something to get excited about. The company expects to add between 750,000 and 1.0 million total retail postpaid phone subscribers. Total mobility and broadband service revenue should grow 2.0% to 3.0%, hitting approximately $93 billion. Wireless service revenue growth is expected to be flat as Verizon shifts focus to volume-based growth rather than squeezing existing customers harder.
The real attention-grabber: adjusted EPS guidance of $4.90 to $4.95, well above the $4.76 analyst consensus. Free cash flow is projected at $21.5 billion or more, representing year-over-year growth of at least 7% and marking the highest level since 2020. Operating cash flow should land between $37.5 billion and $38.0 billion, with capital expenditures ranging from $16.0 billion to $16.5 billion.
Shares were trading up 5.25% at $41.90 in premarket action Friday, which suggests investors are willing to believe the turnaround story. At least for now.
