Verizon Communications Inc. (NYSE: VZ) demonstrated robust operational and financial performance in the fiscal fourth quarter, with key metrics showing marked improvement compared to the prior year and signaling a positive path forward. The telecommunications company reported quarterly revenues of $36.40 billion, reflecting a 2.0% increase year-over-year and surpassing the analyst consensus estimate of $36.06 billion. Adjusted earnings per share (EPS) came in at $1.09, ahead of the projected $1.05.
Subscriber growth was particularly notable during the period. Verizon added 616,000 postpaid phone net subscribers, up from 504,000 in the same quarter the previous year, marking the strongest quarterly net additions in this category since 2019. This gain highlights renewed consumer interest and improved traction in a competitive marketplace.
Broadband and Fixed Wireless Growth
The company reported 372,000 net additions in its broadband segment, which benefited significantly from fixed wireless access (FWA) growth. FWA net additions totaled 319,000 for the quarter, increasing the subscriber base to over 5.7 million. Additionally, the Fios internet service saw a net increase of 67,000 connections. Overall, the total broadband connections expanded to more than 16.3 million at quarter end, buoyed by the recent closing of Verizon's acquisition of Frontier Communications.
Wireless service revenue in the fourth quarter reached $21.0 billion, marking a modest 1.1% year-over-year increase, reflecting steady demand in this core business area.
Consumer Segment Performance
The Consumer segment drove much of the growth, with revenue rising 3.2% year-over-year to $28.44 billion. Wireless retail postpaid phone net additions within this segment stood at 551,000, compared with 367,000 during the prior-year quarter. Consumer wireless service revenue rose 1.2% to $17.37 billion. Churn rates remained relatively low, with consumer wireless retail postpaid churn at 1.21% and wireless retail postpaid phone churn at 0.95%. The average revenue per account (ARPA) for consumer wireless postpaid customers improved 1.2% year-over-year to $147.36.
Prepaid wireless retail core also saw positive growth, with net additions reaching 109,000 in the quarter.
Business Segment Developments
In contrast, Verizon's Business segment revenue declined by 1.8% year-over-year to $7.37 billion. The business segment recorded 11,000 wireless retail postpaid net additions, including 65,000 postpaid phone net additions. Wireless service revenue for business customers increased slightly by 0.5% to $3.59 billion. Churn metrics for this segment were higher than in Consumer, with wireless retail postpaid churn at 1.64% and wireless retail postpaid phone churn at 1.27%.
Profitability within both segments experienced slight declines, with Consumer segment EBITDA margin sliding by 100 basis points to 36.5%, and Business segment EBITDA margin decreasing by 10 basis points to 22.0%. Overall, Verizon's adjusted EBITDA for the quarter was $11.86 billion, a decrease from $11.93 billion year-over-year.
Profitability and Cash Flow
Verizon's reported net income for the quarter was $2.45 billion, down from $5.11 billion in the comparable period last year. Free cash flow declined as well, registering $4.37 billion compared to $5.36 billion year-over-year.
Strategic Highlights and Market Position
Verizon CEO Dan Schulman emphasized the significance of completing the Frontier Communications acquisition on January 20, a milestone expected to substantially increase Verizon’s fiber footprint to encompass more than 30 million homes and businesses. This move is central to Verizon's strategic focus on expanding its fiber infrastructure and broadband capabilities, essential components of its competitive positioning.
Schulman noted that Verizon is at a pivotal inflection point, actively pursuing an ambitious growth agenda to recover market share lost to rivals AT&T Inc. and T-Mobile US, Inc. New management has implemented more aggressive promotional offers and operational streamlining aimed at strengthening customer retention. Notable tactics include offering free premium smartphones with new line activations and bundling deals that provide customers perks like complimentary Samsung TVs, thereby differentiating Verizon in a highly competitive landscape.
Additionally, Schulman has initiated organizational restructuring efforts, including reducing the workforce by approximately 13,000 positions to create a leaner, faster-moving company. These changes respond to challenges experienced due to past price increases and customer service issues that eroded momentum.
Outlook for Fiscal Year 2026
Looking ahead, Verizon projects total retail postpaid phone net additions in the range of 750,000 to 1.0 million for fiscal 2026. The company anticipates mobility and broadband service revenues will grow between 2.0% and 3.0%, targeting approximately $93 billion. Wireless service revenue is expected to remain flat as Verizon focuses on driving sustainable volume-based growth rather than short-term price increases.
Adjusted EPS guidance is set between $4.90 and $4.95, exceeding analyst expectations of $4.76. Management forecasts free cash flow of $21.5 billion or more, which would represent at least 7% annual growth and the highest level since 2020. Operating cash flow guidance ranges from $37.5 billion to $38.0 billion, while capital expenditures are projected between $16.0 billion and $16.5 billion.
Stock Market Reaction
Following the release of the quarterly results and forward guidance, Verizon shares gained 5.25%, trading at $41.90 in premarket activity. This positive investor response reflects confidence in the company’s growth initiatives and financial outlook.
Verizon’s recent financial performance and strategic moves position it strongly within a competitive telecommunications sector, with a clear emphasis on fiber expansion and subscriber growth. The company’s efforts to optimize operations and enhance customer acquisition and retention underpin its outlook for improved profitability and cash flow over the coming year.