Verizon Communications Inc. Q1 FY2026 earnings call

1. Transformation goals: Create a new Verizon to be the best, shift culture to delight customers and deliver for shareholders, leverage network excellence for mobility and broadband growth, and be fiscally responsible. 2. Priorities this year: Grow mobility and broadband through sustainable volume-based growth, execute on transformation including Frontier integration and customer experience improvement, continue network excellence with C-band deployment and fiber building. 3. Fourth quarter progress: Delivered over a million net ads, took share, and met financial guidance. 4. Cost savings: Drove $5B in cost out, with areas like legacy network decommissioning, customer experience cost reduction, IT and real estate optimization, marketing efficiency, workforce and contractor spend reduction, and Frontier synergy doubling. 5. Frontier integration: Closed on January 20th, in the middle of integration, with convergence offers in market within 48 hours, and over $16M broadband subs including Frontier, with Frontier adding 500k fiber subs. 6. Capital allocation: $16 - $16.5B CapEx envelope, focused on mobility and broadband, C-band build near completion with small cells, 2M prems passed with fiber this year, and narrowed focus to growth-aligned areas. 7. Prepaid business: Six straight quarters of volume growth, translating to revenue growth, with Visible and Total Wireless brands performing well. 8. Wholesale and MVNOs: Signed long-term agreement with cable companies, partnership is accretive. 9. AI Connect: Seeing demand for fiber, including dark and lit fiber, with signed deals with hyperscalers and other logos.

1. Volume: 750 to 1 million retail postpaid net ads. 2. Service revenue: Mobility and broadband service revenue 2% to 3%. 3. 2026 is transitional for wireless service revenue towards sustainable volume-based growth. 4. Adjusted EPS: 4% to 5% growth. 5. Cash flow: At least 7% growth, at least $21.5B. 6. CapEx: $16 to $16.5B for the year. 7. Share repurchases: Board authorized up to $25B over three years, with at least $3B in 2026.

Q: How much of the volume improvement strategy is intended to be driven by lower churn versus higher gross ads?

A: Focus on retention and churn improvements, with reducing churn by five basis points getting more than halfway to net ad target, and using promotional spend for the other half.

Q: What's driving the pressure on wireless service revenue in 2026?

A: Ongoing promo-amortization pressure, lapping pricing actions from last year (180 basis points pressure), but offset by perks penetration, customers taking adjacent services, prepaid business growth, and broadband convergence opportunities.

Q: Is Verizon expected to continue being aggressive on acquisition side?

A: Matched competitor offers in fourth quarter, will drive sustainable buying growth but be financially disciplined.

Q: How are CapEx savings achieved with Frontier integration?

A: Narrowed focus to mobility and broadband, C-band build near completion with lower unit cost small cells, efficient fiber deployment with 2M prems passed this year, and rationalizing non-growth aligned CapEx.

Q: Thoughts on business wireless service revenue and customer growth in 2026?

A: Public sector pressure from 2025 behind, focused on growing mobility and broadband sustainably, deemphasizing low-margin deals, and AI Connect and fiber demand helping stem legacy declines.