Verizon’s first quarter landed better with investors than it did with analysts. The stock moved up after the company reported adjusted earnings and EBITDA that topped expectations, even as revenue came in below forecasts and the quarter still carried the drag of a January network outage.
Verizon reported revenue of $34.44 billion, up 2.9% from a year earlier but short of the $34.95 billion analysts had expected. Adjusted earnings per share came in at $1.28, ahead of the $1.21 estimate, while adjusted EBITDA reached $13.4 billion, above the $13.14 billion consensus. The company’s adjusted EBITDA margin was 38.9%, and its operating margin held at 23.9%, in line with the same quarter last year.
Management said the quarter’s strength came from improved postpaid phone net additions and lower acquisition and retention costs. On the earnings call, CEO Daniel Schulman said Verizon is deliberately moving away from low-margin, highly promotional activity and toward more durable recurring service revenue. “We are purposely shifting our mix towards durable recurring service revenues and away from low-margin, highly promotional activity,” he said.
That message fit the numbers. The company’s revenue miss showed the business is still under pressure to grow the top line, but the earnings beat suggested Verizon is getting more efficient about how it wins and keeps customers. The January outage was a headwind in the period, yet it did not stop the quarter from landing as a positive read in the market.
Analysts pressed Schulman on whether Verizon can keep that balance. Michael Rollins of Citi asked about the outlook for accounts, ARPA and pricing, while Michael Ng of Goldman Sachs questioned device upgrade activity and the move away from subsidies. Schulman said the company is shifting its focus from line growth to higher-quality accounts, and that ARPA and account net additions should improve as promotional amortization pressures ease. He also said Verizon is using micro-segmentation to tailor offers, reducing reliance on free handsets and concentrating on profitability rather than blanket promotions.
The next layer of the story is cost control. John Hodulik of UBS asked about the pace and impact of Verizon’s $5 billion operating expense savings program, along with its broadband strategy. CFO Anthony Skiadas said the savings are coming from network streamlining, workforce reductions and more use of digital channels. Schulman also stressed that Verizon is pushing harder into fiber and broadband market penetration, and he pointed to a continued aggressive expansion strategy that could shift the mix further toward fiber.
There was also a clear capital-allocation message. Sebastiano Petti of JPMorgan asked about fixed wireless access subscriber targets and the cadence of buybacks, and Skiadas said Verizon remains committed to at least $3 billion in share repurchases, with room to do more if excess cash is available. Sean Diffley of Morgan Stanley pressed for concrete examples of AI’s effect on costs and staffing, and Schulman said a multi-layered AI stack is already improving customer satisfaction, network reliability and operational efficiency.
Verizon’s quarter points to a company trying to trade promotional intensity for steadier service revenue, with fiber, broadband, fixed wireless access and AI all part of the same reset. The question for the next few quarters is not whether the strategy sounds coherent; it is whether Verizon can keep growing high-quality accounts, deliver the $5 billion in cost savings and hold customers long enough for the margins to keep improving.