Verizon (Verizon (VZ)) reported its second-quarter results on Friday, and the numbers tell a story of a company that's finding a way to grow without getting into a price war. Adjusted earnings came in at $1.30 per share, beating the analyst consensus of $1.27, according to market data. Revenue, however, landed at $34.25 billion, missing the $35.11 billion estimate. The culprit? Customers are holding onto their phones longer, which means fewer equipment sales. GAAP diluted earnings per share fell 22% year over year to 92 cents, and net income dropped 22.9% to $3.9 billion.

But here's the thing: Verizon is quietly rebuilding its subscriber base through simpler wireless plans, bundled offerings, and loyalty rewards. It's a strategy that seems to be working, even as slower smartphone upgrades continue to pressure equipment revenue.

Verizon Revamps Customer Strategy

Verizon has been playing catch-up to T-Mobile (TMUS) in recent years, which has been gobbling up wireless market share. Enter CEO Dan Schulman, who took the helm in late 2025 and has been on a mission to simplify the company's offerings and improve the customer experience. Speaking at the Bloomberg Tech conference in June, Schulman promised a "steady drumbeat of improvements" over the coming months.

True to his word, Verizon has introduced its Simplicity unlimited 5G plan with straightforward pricing, access to its fastest 5G network, and mobile hotspot data. It also launched Verizon One, which bundles wireless and home internet into a single bill, and expanded its loyalty rewards program with discounts and promotional offers. The idea is to give customers a reason to stick around without resorting to the aggressive subsidies that have historically defined the industry.

Profitability and Cash Flow Improve

Total operating revenue slipped 0.7% year over year to $34.3 billion, but the bottom line tells a different story. Adjusted EBITDA jumped 7.2% to a record quarterly $13.7 billion, and adjusted earnings per share rose 6.6%. Operating cash flow climbed 16.3% to $10.44 billion, while free cash flow increased 24.4% to $6.43 billion. Capital expenditures totaled $4.01 billion during the quarter. Verizon ended the period with $136.5 billion in total unsecured debt and $128.7 billion in net unsecured debt.

The company also repurchased $1 billion of its shares during the quarter and raised its full-year share repurchase target to $4.5 billion from at least $3 billion. That's a clear signal that management sees the stock as undervalued.

Subscriber Growth Continues

Mobility and broadband service revenue increased 2.8% year over year to $23.4 billion. Wireless equipment revenue, however, fell 19.7% to $5.02 billion, reflecting those longer upgrade cycles. But the headline number is subscriber growth: Verizon added 184,000 postpaid phone subscribers, 73,000 prepaid subscribers, and 348,000 broadband customers during the quarter, lifting total broadband connections to 17.1 million. The postpaid phone additions easily topped analysts' expectations of 103,900 net additions, according to FactSet.

Schulman told Reuters on Friday that the company is attracting subscribers and improving long-term retention by offering greater value rather than relying on aggressive promotional subsidies. Consumer revenue totaled $26.24 billion with a 30.6% operating margin, while business revenue reached $7.16 billion with a 13.9% operating margin.

Outlook Raised

Verizon raised its full-year adjusted EPS guidance to a range of $4.99 to $5.04 from its previous forecast of $4.95 to $4.99. The updated outlook is above the analyst consensus estimate of $4.96. The company also reaffirmed its expectation for postpaid phone net additions in the upper half of its previously announced range of 750,000 to 1 million.

On the revenue side, Verizon increased its mobility and broadband service revenue growth forecast to 2.5% to 3.0% from 2.0% to 3.0%. It continues to expect operating cash flow growth of approximately 2% to 4% and raised its free cash flow growth outlook to 9% to 10% from at least 7%.

Verizon Price Action

Verizon shares were down 1.23% at $43.28 during premarket trading on Friday, according to market data. The slight dip suggests investors are still digesting the mixed results, but the subscriber growth and raised guidance offer a compelling narrative for the long term.