Telecommunications giant Verizon (NYSE: VZ) missed Wall Street’s revenue expectations in Q3 CY2025 as sales only rose 1.5% year on year to $33.82 billion. Its non-GAAP profit of $1.21 per share was 1.5% above analysts’ consensus estimates.

Is now the time to buy VZ? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

Verizon’s third quarter saw a positive market reaction despite missing Wall Street’s revenue expectations, reflecting investor confidence in the company’s evolving strategy under new CEO Dan Schulman. Management attributed steady performance to increased upgrades in its consumer base, the expansion of converged offerings, and ongoing cost discipline. Schulman acknowledged that while Verizon’s network investments have built a strong foundation, customer growth has lagged. CFO Anthony Skiadas credited a “combination of pricing actions and cost reduction” for supporting earnings and cash flow, while also highlighting the company’s continued focus on broadband and prepaid subscriber growth.

Looking ahead, Verizon’s leadership outlined a multi-year plan centered on growing its customer base through enhanced retention, broader fiber and wireless convergence, and significant cost transformation. CEO Dan Schulman emphasized a commitment to “delighting customers and winning responsibly in the market,” with investments in technology, AI-driven customer experiences, and targeted value propositions. Management plans to aggressively reduce operating expenses while reallocating resources to high-growth areas such as broadband expansion and integration of the pending Frontier acquisition. Schulman stated, “We are reinventing how we operate to make Verizon more agile and efficient,” setting the stage for a fundamental shift in strategy and execution.

Key Insights from Management’s Remarks

Verizon’s management attributed third quarter outcomes to increased customer upgrades, broadband growth, and early effects of a renewed customer-centric focus. The leadership team also discussed the path forward for operational transformation and strategic portfolio changes.

• Consumer upgrades drive engagement: Management reported a 16% year-over-year increase in consumer device upgrades, attributing this to the “best value guarantee” program that is resonating with customers and supporting retention efforts.
• Convergence expands retention: The share of consumer postpaid customers adopting both broadband and wireless services grew, with converged users showing churn rates nearly 40% lower than the overall base. This supports management’s belief in convergence as a foundation for future growth.
• Broadband and fixed wireless momentum: The company added 306,000 broadband subscribers, including gains from both Fios fiber and fixed wireless access (FWA). FWA, now at 5.4 million subscribers, contributed to annualized revenue surpassing $3 billion, reinforcing its growing relevance.
• Prepaid business recovery: Verizon’s prepaid segment delivered its fifth consecutive quarter of positive net additions and marked the first year-over-year prepaid revenue growth since the TracFone acquisition, reflecting successful brand positioning and expanded distribution.
• Cost discipline and cash flow: Management highlighted ongoing cost reduction and CapEx efficiency, which, along with targeted pricing actions, drove a 17% year-over-year increase in free cash flow and improved the company’s debt leverage ahead of schedule.

Drivers of Future Performance

Verizon’s outlook centers on shifting to a customer-first mindset, aggressive cost transformation, and leveraging AI and convergence to drive sustainable volume and earnings growth.

• Customer experience overhaul: Schulman outlined a strategy to radically improve customer satisfaction, aiming for industry-low churn by investing in personalized offers, simplified service, and AI-powered solutions to anticipate and address pain points.
• Cost structure and portfolio optimization: Management will aggressively reduce operating expenses and exit non-strategic, low-margin business lines, with savings redeployed to support growth in core mobility and broadband segments while maintaining a steady dividend commitment.
• Fiber and convergence expansion: Verizon plans to accelerate the rollout of fiber and fixed wireless access, particularly through the pending Frontier acquisition and new partnerships like Tillman. Leadership expects these moves to create substantial cross-sell opportunities and improve retention and profitability.

Catalysts in Upcoming Quarters

In the coming quarters, our analysts will closely track (1) progress on integrating the Frontier acquisition and expanding converged fiber and wireless offerings, (2) evidence of sustained improvements in customer retention and lower churn rates as new customer-centric initiatives take hold, and (3) the pace and impact of cost transformation initiatives, including portfolio optimization and exits from legacy businesses. The evolution of AI-driven customer experiences and continued broadband subscriber growth will also be crucial markers of success.

Verizon currently trades at $40.22, up from $39.32 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free for active Edge members).

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