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VERIZON COMMUNICATIONS INC (VZ)·Q2 2025 Earnings Summary

Executive Summary

  • Revenue rose 5.2% year over year to $34.50B; adjusted EPS was $1.22, supported by a record consolidated adjusted EBITDA of $12.81B. Total wireless service revenue reached $20.95B, up 2.2% YoY .
  • Verizon raised 2025 guidance: adjusted EBITDA growth to 2.5–3.5%, adjusted EPS growth to 1.0–3.0%, cash from operations to $37–$39B, and free cash flow to $19.5–$20.5B, citing strong execution and a $1.5–$2.0B tax reform benefit .
  • Broadband momentum continued with 293K net adds (278K FWA), passing 5.1M FWA subscribers; total broadband connections exceeded 12.9M .
  • Near-term catalysts: guidance raise and cost actions (voluntary separation savings, copper decommissioning, managed services), AI-enabled customer care launch on June 24, and progress toward the Frontier acquisition close (early 2026) .

What Went Well and What Went Wrong

What Went Well

  • Record consolidated adjusted EBITDA ($12.81B) and strong adjusted EPS ($1.22); management emphasized “resiliency” and operating leverage from service revenue and cost initiatives .
  • Broadband share gains: 293K total net adds in Q2, FWA net adds of 278K with the base surpassing 5.1M; tracking toward 8–9M FWA subs by 2028 .
  • Business segment operating income +27.6% YoY and EBITDA margin expansion to 22.9%; contributions from private 5G and AI Connect and disciplined deal posture .
    Quote: “Consolidated adjusted EBITDA in the quarter was $12.8 billion, which is the highest we have ever reported” — CFO Tony Skiadas .

What Went Wrong

  • Consumer postpaid phone net losses of 51K; postpaid phone churn remained elevated at 0.90%, reflecting lingering effects from Q1 pricing actions and competitive intensity .
  • Business phone net adds slowed to 42K vs 135K in the prior year quarter, largely due to public sector pressures expected to persist through H2 (subsiding toward year-end) .
  • Higher upgrade activity increased device costs; management acknowledged deceleration in postpaid ARPA growth and will maintain discipline (value guarantee offsets) .

Financial Results

Consolidated performance (oldest → newest)

MetricQ4 2024Q1 2025Q2 2025
Total Operating Revenues ($USD Billions)$35.68 $33.49 $34.50
GAAP EPS ($)$1.18 $1.15 $1.18
Adjusted EPS ($)$1.10 $1.19 $1.22
Operating Income ($USD Billions)$7.42 $7.98 $8.17
Consolidated Adjusted EBITDA ($USD Billions)$11.93 $12.56 $12.81
Total Wireless Service Revenue ($USD Billions)$20.00 $20.76 $20.95

Segment breakdown

Segment MetricQ4 2024Q1 2025Q2 2025
Consumer Total Revenue ($B)$27.56 $25.62 $26.65
Consumer Wireless Service Rev ($B)$16.52 $17.20 $17.37
Consumer EBITDA ($B)$10.34 $10.97 $11.23
Consumer EBITDA Margin (%)37.5% 42.8% 42.1%
Consumer Postpaid Phone Net Adds (’000)426 (356) (51)
Consumer Postpaid Churn (%)1.12% 1.13% 1.12%
Consumer Postpaid Phone Churn (%)0.89% 0.90% 0.90%
Consumer ARPA ($)$139.77 $146.46 $147.50
Business Total Revenue ($B)$7.50 $7.29 $7.28
Business Wireless Service Rev ($B)$3.48 $3.57 $3.58
Business EBITDA ($B)$1.66 $1.68 $1.67
Business EBITDA Margin (%)22.1% 23.1% 22.9%
Business Phone Net Adds (’000)142 67 42
Business Postpaid Churn (%)1.45% 1.52% 1.61%
Business Postpaid Phone Churn (%)1.09% 1.15% 1.26%

KPIs

KPIQ4 2024Q1 2025Q2 2025
Total Broadband Net Adds (’000)408 339 293
FWA Net Adds (’000)373 308 278
Fios Internet Net Adds (’000) – Total51 45 32
FWA Subscribers (Millions)~4.6 >4.8 >5.1
Net Unsecured Debt ($B)$113.68 $115.06 $115.96
Net Unsecured Debt / Adj. EBITDA (LTM) (x)2.3x 2.3x 2.3x

Results vs S&P Global consensus (Primary EPS, Revenue, EBITDA)

MetricQ4 2024 EstimateQ4 2024 ActualQ1 2025 EstimateQ1 2025 ActualQ2 2025 EstimateQ2 2025 Actual
Primary EPS ($)1.096*1.10*1.148*1.19*1.189*1.22*
Revenue ($USD Billions)35.33*35.68*33.28*33.49*33.71*34.50*
EBITDA ($USD Billions)12.04*12.08*12.34*12.84*12.65*12.67*

Values retrieved from S&P Global.

Highlights: Q2 EPS and revenue exceeded consensus; Q1 EPS/revenue modest beats; Q4 EPS/Revenue broadly in line to slightly above.

Guidance Changes

MetricPeriodPrevious Guidance (Apr-2025)Current Guidance (Jul-2025)Change
Adjusted EBITDA Growth (%)FY 20252.0%–3.5% 2.5%–3.5% Raised (midpoint +50 bps)
Adjusted EPS Growth (%)FY 20250%–3.0% 1.0%–3.0% Raised (floor +100 bps)
Cash Flow from Operations ($B)FY 2025$35–$37 $37–$39 Raised
Free Cash Flow ($B)FY 2025$17.5–$18.5 $19.5–$20.5 Raised
Total Wireless Service Revenue Growth (%)FY 20252.0%–2.8% 2.0%–2.8% Maintained
Capital Expenditures ($B)FY 2025$17.5–$18.5 $17.5–$18.5 Maintained

Drivers: Strong H1 execution, operating leverage, and $1.5–$2.0B benefit from tax legislation led to higher FCF/CFFO and EPS/EBITDA guidance .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
AI/customer experienceBrand refresh, value-added services momentum AI-enabled care; perks growth; double-digit prepaid turnaround CX launch on Jun 24; AI tools, 24/7 support; improved retention focus Improving
Churn & retentionPostpaid phone churn 0.89%; disciplined promotions Elevated churn from price-ups; expected normalization H2 Postpaid phone churn 0.90%; CBAN deployment lowers churn; loyalty tools in place Stabilizing into H2
Upgrades/device economicsQ4 upgrades high; offset margins Mid-single-digit upgrade growth for 2025 targeted Upgrades up ~30% YoY in Q2; absorbed within EBITDA, maintained discipline Mixed near-term; managed
Broadband expansion (CBAN/Fios/MDU)Fios +51K; FWA +373K Fios +45K; CBAN 80–90% sites by YE; MDU trials Fios +32K total; FWA +278K; MDU rolling in >15 markets; bigger 2026 contributor Steady growth; 2026 ramp
Frontier acquisitionAnnounced; strategic convergence opportunity On track; target close 1Q26 Regulatory approvals progressing; early 2026 close; convergence upside On track
Tax reform impactN/AGuidance excludes tariffs; macro monitored Adds $1.5–$2.0B to 2025 FCF; CFFO raised Positive tailwind
Public sector/macroBusiness wireline declines; mixed demand Public sector pressure in phones Public sector headwinds persist through H2 (subsiding toward year-end) Headwind near-term
Spectrum strategyN/AN/AComfortable current position; build vs buy; supportive of future auctions Neutral

Management Commentary

  • “Our strong operational execution in the first half of the year, coupled with favorable tax reform, gives us the confidence to increase our guidance for the full year” — CFO Tony Skiadas .
  • “Our segmented market strategy… is resonating with our customers… We’re also deploying AI-powered innovations to enhance the customer experience” — CEO Hans Vestberg .
  • “We will not sacrifice our financials just to getting net adds if it doesn’t make sense… Ultimately, our goal is to increase our service revenue and then expand our EBITDA and cash flow” — CEO Hans Vestberg .
  • “We continue to take out cost… copper decommissioning… managed services… voluntary separation program is now behind us” — CFO Tony Skiadas .

Q&A Highlights

  • Capital allocation and buybacks: Priorities remain investing in the business, dividend, debt reduction; buybacks considered after leverage target; Frontier closing requires a holistic capital plan .
  • Churn/retention outlook: Elevated due to price actions and competitive promos; improving tools (AI care, CBAN coverage, convergence) expected to normalize churn in H2 .
  • ARPA/upgrades: Postpaid ARPA growth has decelerated; upgrade rates up in Q2 (~30% YoY) but absorbed while maintaining EBITDA discipline .
  • Broadband trajectory: Confidence in better H2 net adds; MDU solution rolling across >15 markets with stronger contribution in 2026 .
  • Public sector: Business phone net adds pressured; headwinds to persist but subside toward year-end; disciplined deal posture maintained .

Estimates Context

  • Q2 2025: EPS $1.22 vs $1.189 consensus (beat); revenue $34.50B vs $33.71B (beat); EBITDA $12.67B vs $12.65B (in line)*.
  • Q1 2025: EPS $1.19 vs $1.148 (beat); revenue $33.49B vs $33.28B (beat); EBITDA $12.84B vs $12.34B (beat)*.
  • Q4 2024: EPS $1.10 vs $1.096 (in line); revenue $35.68B vs $35.33B (in line); EBITDA $12.08B vs $12.04B (in line)*.

Values retrieved from S&P Global.

Implications: Consensus likely moves up for FY EPS/EBITDA and FCF given raised full-year guidance and tax reform tailwind; near-term churn normalization could support service revenue trajectory into H2 .

Key Takeaways for Investors

  • Guidance raise across EBITDA, EPS, CFFO, and FCF, underpinned by tax reform and strong H1 execution — near-term positive for sentiment and estimates .
  • Service revenue growth with improving ARPA/adjacent services and prepaid turning positive in H2 supports operating leverage into year-end .
  • Broadband thesis intact: dual Fios/FWA approach continues to take share; MDU solution broadens addressable market; CBAN build nearing 80–90% by YE .
  • Cost actions (managed services, copper decommissioning, VSP savings) provide durable margin support even amid elevated upgrades .
  • Watch churn trends and public sector headwinds in H2; management guides to subsiding impact and improved retention via AI/CX and convergence .
  • Frontier acquisition remains a medium-term convergence catalyst; expect capital allocation update closer to close (early 2026) .
  • Trading lens: Guidance raise and beats are near-term positives; monitoring Q3 churn normalization and broadband adds trajectory will be key to sustaining multiple expansion .