Second-quarter revenue fell 0.7% to $34.3bn ($35.2bn expected), as growth in service revenue was offset by lower equipment sales. Mobility and broadband service revenue rose 2.8% to $23.4bn, and retail post-paid phone subscriptions were up by 184,000.
Adjusted cash profit (EBITDA) rose 7.2% to $13.7bn (as expected), with margins rising from 37.1% to 40.1%.
Free cash flow rose 24.4% to $6.4bn, taking the first-half total to $10.2bn. Net unsecured debt fell to $128.7bn from $130.1bn at the end of the first quarter. Share buybacks totalled $1.0bn over the quarter and $3.5bn for the first half, with the full-year target raised to as much as $4.5bn.
For 2026, Verizon now expects adjusted earnings per share growth of 6 to 7% (previously 5 to 6%) and free cash flow growth of 9 to 10% (previously around 7%).
The shares rose 1.3% in pre-market trading.
Our view
Verizon’s turnaround is gaining momentum. Second-quarter revenue dipped slightly, but improving customer trends, tighter cost control and stronger cash generation gave management the confidence to raise its earnings and free cash flow outlook. The results suggest that the strategy is beginning to work, but the longer-term test will be whether Verizon can turn better execution into sustainable revenue growth.
The Consumer division remains the core of the business, and Verizon’s refreshed value proposition looks increasingly important. Clearer pricing, more flexibility and added benefits should make its plans easier to understand and harder to leave. Early signs of lower customer losses are encouraging, and average revenue per account also appears to be moving in the right direction.
Competition remains intense. Discounted handsets and switching incentives are widely used to attract customers, limiting how far any operator can push pricing without risking higher churn. Verizon, therefore, needs its customer proposition to stand out on overall value rather than headline price alone. If successful, that should support loyalty without requiring increasingly expensive promotions.
With limited underlying revenue growth, efficiency is still doing much of the heavy lifting. There should be further savings available, but cost-cutting cannot support growth indefinitely. Over time, Verizon will need a healthier balance between efficiency, customer growth and higher spending per account.
Fixed wireless broadband and the planned Frontier acquisition offer a route to that broader growth. Combining mobile and home broadband can help Verizon capture more household spending, improve customer loyalty and spread the cost of its network across more services. The strategic logic is sound, although execution and financial discipline will be important given the investment required.
Verizon’s massive infrastructure network also offers a small nugget of incremental growth potential, with businesses paying to process time-sensitive AI data closer to users. It is early days, but it could add another revenue stream over time.
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 coming not from reduced growth ambitions but from a more efficient approach to investment.
If improving fundamentals can continue, then we do think that shares can support a slightly higher multiple than the c.8.5 times earnings they currently trade at. The yield is also an attractive feature, but we don’t see a clear catalyst to shift medium-term earnings expectations, which point to low single-digit growth. We remain cautiously optimistic about the opportunity from here.
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 that 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 that yields are variable and not a reliable indicator of future income. Keep in mind that 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.