Verizon’s first-quarter revenue rose 2.9% to $34.4bn, driven by growth in both services and equipment sales. Consumer post-paid phone subscriptions returned to growth, with 55,000 net additions.
Adjusted cash profit (EBITDA) increased 6.7% to $13.4bn ($13.1bn expected), reflecting improved cost discipline.
Free cash flow rose 4.0% to $3.8bn, and net unsecured debt increased to $130.1bn since year-end. Share buybacks totalled $2.5bn over the quarter, with no change to the target of at least $3.0bn for 2026.
For 2026, Verizon now expects adjusted EPS growth of 5-6% (previously 4-5%). Free cash flow guidance remains unchanged, pointing to at least $21.5bn and implying growth of around 7%.
The shares rose 3.6% in pre-market trading.
Our view
Verizon’s turnaround story is starting to take shape, with early signs of improvement and a more confident outlook for 2026. Management is focused on tightening up how the business is run, cutting costs, and putting more emphasis on areas that can drive growth, while stepping back from parts of the business that are no longer pulling their weight.
Consumer remains the biggest part of the business, and mobile customer numbers are starting to improve. However, the way the company is growing is changing. Having relied on price hikes for a while, Verizon cut prices aggressively towards the end of last year to drive customer growth. Since then, the market has settled at those lower levels. That’s broadly positive; price wars are best avoided if possible.
That doesn’t mean the pressure is off. Promotions are still a big part of the story, with free or heavily discounted handsets and switching incentives widely used to win customers. It’s hard for telecom companies to stand out, especially at the cheaper end of the market, so price and perks tend to do most of the talking. Over time, that can weigh on profit margins.
With limited top-line growth, cost control is doing more of the heavy lifting. Improving efficiency will be key to growing profits, and early signs are encouraging. At the same time, Verizon continues to invest in areas with longer-term potential. Fixed wireless broadband is growing quickly, and the Frontier acquisition strengthens its fibre network, helping support a broader push into bundled services.
These bundles, which combine mobile and home broadband, are becoming increasingly important. The battleground is shifting from selling individual products to winning a bigger share of household spending. While mobile plans are focused on adding customers, parts of the broadband market are increasingly focused on maintaining pricing, creating a more mixed competitive backdrop.
For now, strong and improving cash flow remains a key support for dividends and share buybacks, which remain central to the investment case – though never guaranteed. That’s not coming from reduced growth ambitions, but a more efficient approach to investment.
All in, the valuation doesn’t look overly demanding, and we are slightly more optimistic than we were last year. But the challenges of being a telecom giant remain, and while major cost cuts can drive 2026 earnings growth, we remain cautious about the outlook for future years.
Environmental, social and governance (ESG) risk
The telecom industry is low/medium in terms of ESG risk. Data privacy and security is the most significant risk driver, not only because customers are increasingly concerned about privacy, but also because cybersecurity breaches can be costly. Product quality is another key risk, particularly given the networks they manage are considered critical infrastructure. Carbon emissions, human capital and business ethics are also risks worth monitoring.
Verizon’s overall management of material ESG issues is average.
The main specific risk right now centres on lawsuits related to the environmental impact of lead cables. There hasn’t been any material impact yet, but it’s an area to watch. More broadly, Verizon has officers responsible for security and privacy, and its cybersecurity centre meets international standards. Climate risks are reported, and it conducts annual impact assessments. The company offers employee development programs, including tuition assistance, and ensures equal pay for women and men.
Verizon key facts
All ratios are sourced from LSEG Datastream, based on previous day’s closing values. Please remember yields are variable and not a reliable indicator of future income. Keep in mind key figures shouldn’t be looked at on their own – it’s important to understand the big picture.
This article is original Hargreaves Lansdown content, published by Hargreaves Lansdown. It was correct as at the date of publication, and our views may have changed since then. Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by LSEG. These estimates are not a reliable indicator of future performance. Yields are variable and not guaranteed. Investments rise and fall in value so investors could make a loss.
This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment.