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VERIZON COMMUNICATIONS INC (VZ)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered upside to consensus and YoY growth: adjusted EPS $1.19 versus $1.15 YoY and above S&P consensus; total operating revenue $33.5B (+1.5% YoY), and adjusted EBITDA $12.6B, a company record, up ~4% YoY .
  • Wireless service revenue rose to $20.8B (+2.7% YoY), while consumer price-ups elevated churn and drove 356K consumer postpaid phone losses; prepaid posted its best net adds since TracFone acquisition (+137K) .
  • Broadband momentum continued: 339K net adds, including 308K FWA and 45K Fios Internet net adds; management reiterated the 8–9M FWA subscriber target by 2028 .
  • FY25 guidance was maintained (wireless service revenue +2.0%–2.8%, adjusted EBITDA +2.0%–3.5%, adjusted EPS flat to +3%, FCF $17.5B–$18.5B); guidance explicitly excludes potential tariff impacts .
  • Call catalysts: launch of 3-year price lock and free phone guarantee, strong March/April gross adds, and AI Connect demand funnel; management expects churn normalization by 2H25 and better consumer postpaid phone net adds for FY25 .

What Went Well and What Went Wrong

What Went Well

  • Record adjusted EBITDA ($12.6B) and strong FCF ($3.6B), supported by pricing actions, perks adoption, FWA growth, and cost transformation; “best ever” adjusted EBITDA cited by management .
  • Broadband share gains: 339K broadband net adds with 308K FWA; Fios Internet net adds of 45K (41K consumer, 4K business); total broadband connections >12.6M .
  • Prepaid turnaround: core prepaid net adds +137K, “best since the TracFone acquisition,” with expectation of positive service revenue contribution in 2H25 .
  • Quote: “We had an exceptional financial start of the year… Adjusted EBITDA of $12.6 billion was our highest reported result ever” — Hans Vestberg .

What Went Wrong

  • Elevated churn from price-ups led to consumer postpaid phone net losses of 356K and total postpaid phone net losses of 289K; business phone net adds slowed due to federal account pressure (+67K) .
  • Consumer operating margin dipped (29.0% vs. 29.4% YoY) as price actions impacted elasticity; business top-line down 1.2% YoY despite wireless service growth .
  • Tariff uncertainty: guidance excludes tariff impacts; management stated handset tariffs, if high, would be passed to consumers, not absorbed .

Financial Results

Consolidated Performance vs Prior Year and Prior Quarter

MetricQ1 2024Q4 2024Q1 2025
Total Operating Revenue ($USD Billions)$32.98 $35.70 $33.49
Diluted EPS ($USD)$1.09 $1.18 $1.15
Adjusted EPS ($USD)$1.15 $1.10 $1.19
Adjusted EBITDA ($USD Billions)$12.07 $11.93 $12.56
Total Wireless Service Revenue ($USD Billions)$20.23 $20.00 $20.76

Cash Flow

MetricQ1 2024Q4 2024Q1 2025
Cash from Operations ($USD Billions)$7.08 —$7.78
Free Cash Flow ($USD Billions)$2.71 $5.40 $3.64

Segment Breakdown

Segment MetricQ1 2024Q4 2024Q1 2025
Consumer Total Operating Revenues ($USD Billions)$25.06 $27.56 $25.62
Consumer Wireless Service Revenue ($USD Billions)$16.76 $16.50 $17.20
Consumer Operating Income ($USD Billions)$7.37 $6.90 $7.42
Consumer Segment EBITDA ($USD Billions)$10.68 $10.34 $10.97
Consumer Segment EBITDA Margin (%)42.6% 37.5% 42.8%
Business Total Operating Revenues ($USD Billions)$7.38 $7.50 $7.29
Business Wireless Service Revenue ($USD Billions)$3.47 $3.50 $3.57
Business Operating Income ($USD Millions)$399 $594 $664
Business Segment EBITDA ($USD Billions)$1.53 $1.66 $1.68
Business Segment EBITDA Margin (%)20.7% 22.1% 23.1%

KPIs

KPIQ1 2024Q4 2024Q1 2025
Total Retail Postpaid Phone Net Adds/Losses (‘000)(114) +568 (289)
Consumer Postpaid Phone Churn (%)0.83% 0.89% 0.90%
Business Postpaid Phone Churn (%)1.13% 1.09% 1.15%
Consumer ARPA ($)$141.31 $139.77 $146.46
Broadband Net Adds (‘000)~389? See split → Consumer 239; Business 150 → Total 389 408 339
FWA Net Adds (‘000)354 (203 Consumer + 151 Business) 373 308
Fios Internet Net Adds (‘000)53 (49 Consumer + 4 Business) 51 45 (41 Consumer + 4 Business)

Guidance Changes

MetricPeriodPrevious Guidance (Jan 24, 2025)Current Guidance (Apr 22, 2025)Change
Total Wireless Service Revenue Growth (%)FY 20252.0%–2.8% 2.0%–2.8% Maintained
Adjusted EBITDA Growth (%)FY 20252.0%–3.5% 2.0%–3.5% Maintained
Adjusted EPS Growth (%)FY 20250%–3% 0%–3% Maintained
Cash Flow from Operations ($B)FY 2025$35–$37 $35–$37 Maintained
Capital Expenditures ($B)FY 2025$17.5–$18.5 $17.5–$18.5 Maintained
Free Cash Flow ($B)FY 2025$17.5–$18.5 $17.5–$18.5 Maintained
Dividend per Share ($)Q1 2025$0.6775 (Q4 2024) $0.6775 declared Feb 28 Maintained

Note: Guidance explicitly excludes potential tariff impacts .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 & Q4 2024)Current Period (Q1 2025)Trend
AI/Technology initiatives (AI Connect)Strategy unveiled; TAM “$40B+” and >$1B funnel; initial rev recognized in Q4; leveraging fiber, edge, power/space/cooling with partners (NVIDIA, Vultr) .Continued demand; AI Connect highlighted among priorities; expected contribution in Business margins .Accelerating execution and pipeline.
Tariffs/MacroNo explicit guidance exclusion noted; broader execution themes .Guidance excludes tariff impacts; handset tariff hikes would be passed through, CapEx exposure small; supply chain confidence .Heightened caution, explicit caveat.
Pricing and churnARPA growth (4%+ in Q4), selective price actions, promo amortization peaked in 2025 .Elevated churn from price-ups in Dec/Jan; expectation of churn normalization by 2H25; 3-year price lock/free phone guarantee introduced .Near-term churn pressure; abating into 2H.
Broadband strategy (FWA/Fios, MDU)Strong FWA adds; early comments on suburban rollout; Fios expansion to 650k OFS; MDU solution plan .339K broadband net adds; MDU solution launched in >15 markets, expected ramp; reiterated 8–9M FWA target by 2028 .Sustained share gains; segmentation working.
MVNO partnershipsStrategic, accretive relationships; build once, many profitable connections .No change; treated as large enterprise accounts .Stable, supportive of wholesale revenue.
Frontier acquisition & fiberPending acquisition; close expected by early 2026; fiber OFS ramp to 650k in 2025 .Focus on closing; long-term goal 35–40M fiber passings; ramp underway .On plan; provides convergence scale.

Management Commentary

  • Strategy and momentum: “We had an exceptional financial start of the year… Adjusted EBITDA of $12.6 billion was our highest reported result ever… Free cash flow was up over $900 million… We remain confident in our ability to deliver on our 2025 financial guidance” — Hans Vestberg .
  • Consumer transformation: “We launched a game-changing offer, a 3-year price lock and a free phone guarantee… Early indicators in April suggest strong gross add momentum… We expect… better consumer postpaid phone net adds in 2025 compared to 2024” — Sowmyanarayan Sampath .
  • Financial discipline: “We delivered our best ever reported adjusted EBITDA result at $12.6 billion… We remain confident in our ability to deliver on our operational and financial goals for 2025” — Anthony Skiadas .
  • Customer-first value: “Our differentiated value proposition delivers what customers want and need… 3-year price lock and free phone guarantee… My Biz Plan for SMBs” — Hans Vestberg .

Q&A Highlights

  • Tariffs: CapEx exposure to tariffs is “very small”; handset tariffs, if significant, will be passed through, not absorbed .
  • Churn path: Higher elasticity from price-ups in Q1; churn viewed as transitory, abating, with normalization by 2H25; levers include price lock, C-Band expansion, convergence and AI-driven CX .
  • Gross adds momentum: Mid-single-digit March and double-digit April gross adds, driven by Verizon Value Guarantee .
  • Business margins: Mix shifting to wireless (mobility and FWA), cost takeouts (managed services, network decoms) underpin margin expansion .
  • Broadband/MDU: MDU FWA solution launched in >15 markets; phased ramp expected; Fios OFS to 650k in 2025 .
  • MVNO relationships: Strategic, accretive, treated as large enterprises; build-once network strategy reaffirmed .
  • Spectrum/capex: Strong C-Band/mmWave position; incremental edge-outs included in capex envelope; leverage existing fiber/edge assets .

Estimates Context

Metric (Q1 2025)ConsensusActual
Primary EPS ($)1.148*1.19*
Revenue ($USD Billions)33.28*33.49*
EBITDA ($USD Billions)12.34*12.84*
# EPS Estimates17*—
# Revenue Estimates16*—

Values retrieved from S&P Global.*

  • Results vs consensus: EPS and EBITDA were above consensus; revenue modestly above. Drivers: pricing actions, FWA subscriber growth, perks adoption, and cost transformation leveraging SG&A efficiencies and network decommissioning .
  • Implications: Consensus models likely to lift near-term EBITDA/FCF trajectories and acknowledge churn normalization into 2H25, with FY25 guidance maintained and Q1 execution supportive of the mid-to-upper ranges on EBITDA growth .

Key Takeaways for Investors

  • Q1 beat and record adjusted EBITDA underline operating leverage; broadband growth and prepaid turnaround offset near-term postpaid churn pressure from price-ups .
  • The 3-year price lock/free phone offer is resonating early (double-digit April gross adds) and should support churn normalization and improved consumer net adds in 2H25 .
  • Broadband strategy (FWA + Fios + MDU) is working: 339K net adds, confidence in scaling to 8–9M FWA subscribers by 2028; expect continued share gains .
  • AI Connect provides incremental enterprise connectivity demand and margin tailwinds; pipeline and early revenue recognition support Business segment margin expansion .
  • Guidance intact and conservative given tariff uncertainty; capital allocation remains balanced (dividend maintained, deleveraging, capex within envelope) .
  • Near-term trading: Stock should respond to evidence of churn normalization and sustained gross adds momentum; watch tariff headlines and handset upgrade cadence as potential volatility drivers .
  • Medium-term thesis: Mix shift to higher-margin wireless and FWA, convergence benefits, prepaid profitability, and AI connectivity monetization support multi-year EBITDA and FCF growth .

Why Behind Beats/Misses

  • EPS/EBITDA beats: Pricing actions, perks uptake and premium plan mix, expanding FWA base, and cost transformation (VSP savings, managed services, network decoms); Q1 adjusted EBITDA reached $12.6B, “best ever” .
  • Revenue beat: Wireless service revenue +2.7% YoY and FWA growth offset equipment revenue mix; total revenue +1.5% YoY .
  • Postpaid phone losses: Higher churn driven by price-ups in Dec/Jan and federal account pressure; mitigated by strong prepaid net adds and improving gross adds in March/April .

Additional Notes

  • Non-GAAP adjustments: Adjusted EPS excludes amortization of acquisition-related intangibles; prior-year Q1 included a legacy legal matter adjustment .
  • Accounting reclass: Recurring device protection/insurance revenues moved to wireless service revenue in Q1 2025; historical results recast accordingly .
  • Dividend: Quarterly dividend maintained at $0.6775 per share (payable May 1, 2025) .