Verizon Communications Inc (VZ) Q2 2025 Earnings Call Highlights: Strong Revenue Growth and ...

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Wireless Service Revenue: $20.9 billion, up 2.2% year-over-year.
Adjusted EBITDA: $12.8 billion, up 4.1% year-over-year.
Free Cash Flow: $5.2 billion for the quarter; $8.8 billion year-to-date, up over $300 million compared to the first half of 2024.
Consolidated Revenue: $34.5 billion, up 5.2% year-over-year.
Net Unsecured Debt: $116 billion, a $6.9 billion improvement year-over-year.
Net Additions: Over 300,000 net additions across mobility and broadband platforms.
Fixed Wireless Access Subscribers: Surpassed 5 million subscribers.
Consumer Postpaid Phone Net Losses: 51,000 for the second quarter.
Adjusted EPS: $1.22, up 6.1% year-over-year.
Cash Flow from Operating Activities: $16.8 billion for the first half of the year, up more than 1% year-over-year.
CapEx: $8 billion for the first half of 2025.
Guidance for Adjusted EBITDA Growth: Increased to 2.5% to 3.5% for the full year.
Guidance for Free Cash Flow: Raised to $19.5 billion to $20.5 billion for 2025.
Warning! GuruFocus has detected 3 Warning Signs with VZ.
Release Date: July 21, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Verizon Communications Inc (NYSE:VZ) reported a market-leading wireless service revenue of $20.9 billion, up 2.2% from last year.
The company achieved an adjusted EBITDA of $12.8 billion, marking a 4.1% year-over-year increase and setting a record for the best reported quarter.
Free cash flow for the quarter was $5.2 billion, contributing to a year-to-date total of $8.8 billion, an increase of over $300 million compared to the first half of 2024.
Verizon's C-band deployment is ahead of schedule, and the fixed wireless base has surpassed 5 million subscribers.
The company raised its full-year guidance for adjusted EBITDA, adjusted EPS, and free cash flow, driven by strong cash flow from operations and positive impacts from tax reform.
Negative Points
Postpaid phone churn remained elevated this quarter, reflecting the lingering effects of pricing actions and ongoing pressure from federal government accounts.
The wireless market remains competitive, impacting Verizon's strategic and segmented approach.
Consumer postpaid phone net losses totaled 51,000 for the second quarter, although this was an improvement from the prior year period.
Verizon Business delivered 42,000 phone net adds in the second quarter, a decline from 135,000 net adds in the prior year period, largely due to public sector challenges.
The company continues to face elevated competitor promotional activity, affecting consumer postpaid phone churn.
Q & A Highlights
Q: With the increased cash flow from tax benefits, what is Verizon's plan for capital allocation, and can we expect improvements in consumer wireless net additions in 2025? A: Hans Vestberg, CEO, stated that Verizon's capital allocation priorities remain unchanged, focusing on business investment, dividends, debt reduction, and potential buybacks. The tax reform aids in achieving these priorities faster. Regarding consumer wireless, the goal is to improve net additions while maintaining financial discipline, with a focus on service revenue growth and EBITDA expansion.
Q: Can you explain the deceleration in postpaid ARPA growth and the expected upgrade rates for the year? A: Hans Vestberg, CEO, explained that Verizon continues to grow ARPA through various drivers, including broadband step-ups and adjacent services. The expected mid-single-digit upgrade activity for the year reflects both business and consumer investments, despite a recent uptick in upgrades.
Q: How is Verizon progressing with its convergence strategy, and what are the expectations for EBITDA growth for the rest of the year? A: Hans Vestberg, CEO, highlighted Verizon's unique position with ownership of both mobility and broadband assets, offering significant convergence opportunities. Anthony Skiadas, CFO, noted that Verizon's strong EBITDA growth is driven by service revenue increases and cost efficiencies, with expectations to maintain this momentum throughout the year.
Q: What is Verizon's approach to the broadband market, and how do you see Fixed Wireless Access (FWA) evolving? A: Hans Vestberg, CEO, stated that Verizon expects better broadband performance in the second half of the year. FWA growth is tied to the C-band deployment, with expectations to reach 80-90% coverage by year-end, creating more opportunities for FWA expansion.
Q: Can you provide more details on Verizon's cost efficiency initiatives and the impact on churn? A: Hans Vestberg, CEO, and Anthony Skiadas, CFO, emphasized ongoing cost efficiency efforts, including AI integration and network optimization. These initiatives are expected to improve customer experience and reduce churn, with a focus on maintaining financial discipline and leveraging Verizon's network strengths.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.