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VERIZON COMMUNICATIONS INC (VZ)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered modest top-line growth and stronger profitability: revenue rose 1.5% year over year to $33.8B, GAAP EPS increased to $1.17, and adjusted EPS to $1.21; consolidated adjusted EBITDA was ~$12.8B .
  • Against S&P Global consensus, Verizon posted a slight EPS beat (+$0.02), a revenue miss (~$0.45B), and near in-line EBITDA (slight miss) for Q3 2025 (see Estimates Context)*.
  • Management maintained its previously raised full-year 2025 guidance (wireless service revenue growth 2.0–2.8%, adjusted EBITDA +2.5–3.5%, adjusted EPS +1.0–3.0%, FCF $19.5–$20.5B, CFO $37–$39B; CapEx $17.5–$18.5B), emphasizing debt reduction and dividend discipline .
  • New CEO Dan Schulman outlined a customer-first turnaround focusing on churn reduction, cost transformation, capital efficiency, and profitable volume growth; leverage improved to 2.2x net unsecured debt/adjusted EBITDA by quarter-end, positioning for Frontier closing and further FCF gains in 2026 .

What Went Well and What Went Wrong

  • What Went Well

    • Profitability and cash generation: adjusted EPS increased to $1.21, adjusted EBITDA to ~$12.8B, and year-to-date free cash flow reached $15.8B, up from $14.5B in 2024 .
    • Broadband momentum: 306k net adds, including 261k FWA and 61k Fios internet (best in two years); broadband base exceeded 13.2M (+11.1% YoY) .
    • Leverage and capital returns: net unsecured debt declined to $112.0B (2.2x LTM adjusted EBITDA), and the quarterly dividend was raised to $0.6900 (19th consecutive year) .
    • Strategic clarity: Schulman committed to “aggressively transform our culture, our cost structure, and the financial profile of Verizon…to put our customers first,” targeting lower churn and profitable volume growth .

  • What Went Wrong

    • Consumer postpaid phone volumes: 7k net losses (vs. +18k in Q3 2024), impacted by churn (0.91%) and promo amortization, despite stronger gross adds and upgrades .
    • Business segment top line softness: Verizon Business revenue fell 2.8% YoY to $7.1B amid public sector disconnect pressure, though margins improved (EBITDA margin 23.4%) .
    • Wireless equipment cost pressure: wireless equipment revenue grew 5.2% YoY, but higher upgrade activity and promo amortization were headwinds; management flagged ongoing cost-reduction work in services and SG&A .

Financial Results

MetricQ3 2024Q2 2025Q3 2025
Total Operating Revenue ($USD Billions)$33.33 $34.50 $33.82
GAAP Diluted EPS ($)$0.78 $1.18 $1.17
Adjusted EPS ($)$1.19 $1.22 $1.21
Consolidated Adjusted EBITDA ($USD Billions)$12.49 $12.81 ~$12.78
Wireless Service Revenue ($USD Billions)$20.60 $20.95 $21.03
  • Estimates vs Actuals (S&P Global)*
MetricConsensusActual
Primary EPS ($)1.19*1.21*
Revenue ($USD Billions)34.27*33.82*
EBITDA ($USD Billions)12.73*12.71*
  • EPS beat (+$0.02), revenue miss (~$0.45B), EBITDA slight miss/in-line*.
  • Primary EPS – # of Estimates: 17; Revenue – # of Estimates: 15*.

Segment Breakdown

SegmentMetricQ3 2024Q2 2025Q3 2025
ConsumerTotal Revenue ($B)$25.36 $26.65 $26.11
ConsumerOperating Income ($B)$7.60 $7.64 $7.66
ConsumerOperating Margin (%)30.0% 28.7% 29.4%
ConsumerSegment EBITDA ($B)$11.02 $11.23 $11.23
ConsumerSegment EBITDA Margin (%)43.4% 42.1% 43.0%
BusinessTotal Revenue ($B)$7.35 $7.28 $7.14
BusinessOperating Income ($B)$0.57 $0.64 $0.64
BusinessOperating Margin (%)7.7% 8.8% 8.9%
BusinessSegment EBITDA ($B)$1.61 $1.67 $1.67
BusinessSegment EBITDA Margin (%)21.8% 22.9% 23.4%

KPIs

KPIQ3 2024Q2 2025Q3 2025
Consumer Postpaid Phone Net Adds (‘000)+18 -51 -7
Consumer Postpaid Phone Churn (%)0.83% 0.90% 0.91%
Consumer Postpaid ARPA ($)$144.94 $147.50 $147.91
FWA Net Adds – Consumer (‘000)209 164 121
Fios Internet Net Adds – Consumer (‘000)39 28 59
Total Broadband Net Adds – Consumer (‘000)235 181 168
FWA Revenue ($USD Millions)$562 $728 $758
Business Postpaid Phone Net Adds (‘000)149 42 51
Business Postpaid Phone Churn (%)1.12% 1.26% 1.25%

Guidance Changes

MetricPeriodPrevious Guidance (Q2 2025)Current Guidance (Q3 2025)Change
Total Wireless Service Revenue GrowthFY 20252.0%–2.8% 2.0%–2.8% Maintained
Adjusted EBITDA GrowthFY 20252.5%–3.5% 2.5%–3.5% Maintained
Adjusted EPS GrowthFY 20251.0%–3.0% 1.0%–3.0% Maintained
Cash Flow from Operations ($B)FY 2025$37–$39 $37–$39 Maintained
Free Cash Flow ($B)FY 2025$19.5–$20.5 $19.5–$20.5 Maintained
Capital Expenditures ($B)FY 2025$17.5–$18.5 Within or below $17.5–$18.5 Maintained (slight downward bias)
Dividend per Common Share ($)Q3/Q4 2025$0.6775 (Q2) $0.6900 (Q3) Raised

Note: Q3 8-K also reiterated the revised FCF outlook vs original (CFO $37–$39B; FCF $19.5–$20.5B vs original $17.5–$18.5B) .

Earnings Call Themes & Trends

TopicQ1 2025 (Prior)Q2 2025 (Prior)Q3 2025 (Current)Trend
Customer-first strategy, price lockLaunched 3-year price lock/free phone; focus on retention and lower churn through offers and AI CX Best Value Guarantee drove stronger gross adds; continued elevated churn but actions underway New CEO mandates customer-first culture with disciplined growth and lowest churn aspiration Sharpening and accelerating
AI initiatives (CX, ops, value prop)AI in customer care/personalization; AI Connect enterprise traction AI-enabled customer care launch (June 24); AI Connect pipeline doubling CEO emphasizes AI to simplify offers, reduce churn/cost, and expand AI infra opportunity Broader, more central
Convergence, fiber expansion, FrontierTarget 35–40M fiber passings long-term; convergence lowers churn Frontier approvals progressing; fiber passings +650k in 2025; strong FWA Frontier close targeted early 2026; >18% of consumer postpaid phone base converged; convergence key growth lever Execution continues; post-close ramp
Cost transformationVoluntary separation program savings; copper decommissioning; deal-desk discipline Continued SG&A/network cost efficiency; EBITDA leverage CEO sets multi-year cost overhaul; simpler, leaner operation Intensifying
Capital allocation, leverage, dividendPrioritized investment, dividend, debt reduction; buybacks when leverage target achieved Raised FCF guidance; tax reform tailwinds; inside 2.3x leverage target Net unsecured debt/adj EBITDA at 2.2x; dividend raised; maintained long-term leverage target Strengthening
Broadband (FWA/FiOS/MDU)339k broadband net adds; FWA/FiOS segmentation; MDU solution to ramp 293k broadband net adds; >5.1M FWA subs; MDU rollout expanding 306k broadband net adds; ~5.4M FWA subs; FiOS net adds best in two years Consistent growth
Public sector, macro/tariffsPublic sector pressure; tariffs monitored; minimal CapEx exposure Ongoing public sector disconnect pressure; expect subsiding late year Continued public sector churn pressure; customer economics healthy despite promos Gradual normalization expected

Management Commentary

  • “We will rapidly shift to a customer-first culture…aggressively transform our culture, our cost structure, and the financial profile of Verizon…to put our customers first, compete effectively, and deliver sustainable returns” — CEO Dan Schulman .
  • “Converged customers on fiber have a mobility churn rate that's nearly 40% lower than our overall mobility base” — CFO Tony Skiadas .
  • “We will invest significantly…to drive mobility and broadband growth, and we will fund these investments by aggressively reducing our entire cost base” — CEO Dan Schulman .
  • “Net unsecured debt…dropping to 2.2x…inside of our target leverage ahead of schedule and before the Frontier closing” — CFO Tony Skiadas .

Q&A Highlights

  • Churn and consumer volume recovery: Management aims industry-low churn via customer-first programs and targeted value; gross adds improved, but Q3 saw phone net losses as retention actions scale .
  • Leverage flexibility and spectrum: Comfortable with 2.0–2.25x net unsecured leverage; temporary uptick at Frontier close acceptable; opportunistic spectrum decisions remain “build vs buy” with strong current position .
  • Fiber/Convergence: Organic fiber passings on track (650k in 2025) and Frontier adds runway; Tillman partnership expands capital-light FiOS footprint; convergence to reduce churn and drive cross-sell .
  • Cost opportunities: AI-enabled care, network decommissioning (copper), IT/real estate consolidation; disciplined deal desk in wireline/wireless to lift margins .
  • 2026 FCF and CapEx: Expect 2026 FCF above 2025 even including Frontier; CapEx efficiency and de-emphasizing low-growth areas underpin outlook .

Estimates Context

  • S&P Global consensus vs actual (Q3 2025): EPS 1.19 vs 1.21 (beat), revenue $34.27B vs $33.82B (miss), EBITDA $12.73B vs $12.71B (near in-line/slight miss)*.
  • With promo amortization and elevated upgrades headwinds, EBITDA held near expectations on cost savings and ARPA/perks/FWA growth; estimates likely to adjust modestly for Consumer volume trajectory and ongoing promo amortization while incorporating cost program acceleration .

Key Takeaways for Investors

  • Execution pivot under new CEO: Expect near-term focus on churn reduction, customer experience simplification, and targeted offers; watch January update for explicit cost actions and 2026 guidance catalysts .
  • Convergence is the linchpin: Frontier close (early 2026) plus Tillman partnership should increase fiber reach and cross-sell potential, lowering churn and lifting ARPA; sustained broadband net adds and FiOS momentum support this theme .
  • Balance sheet strength: Net unsecured leverage at 2.2x with ongoing debt paydown and a raised dividend improves resilience and optionality; buybacks remain a later-stage lever post Frontier .
  • Near-term trading lens: Slight headline miss on revenue and in-line EBITDA versus consensus contrasted with strategic reset tone and cash flow strength; stock narrative sensitive to evidence of churn improvement and Consumer net add inflection .
  • Margin trajectory: Cost transformation, AI-enabled efficiencies, and portfolio optimization should support EBITDA growth even with disciplined promotional posture .
  • Broadband durability: Continued FWA/Fios growth with improving mix and ARPU; MDU rollouts add incremental footprint, supporting multi-year share gains .

Footnote: *Values retrieved from S&P Global.