Verizon Communications (NYSE:VZ) Chief Financial Officer Tony Skiadas said the company is focused on growing its mobility and broadband businesses while maintaining spending discipline, improving customer retention, reducing costs and increasing cash returns to shareholders.
Speaking at Citi’s Global TMT Conference, Skiadas said Verizon’s first-half performance reflected what management views as a structural improvement in its business. The company added more than 1 million mobility and broadband net additions during the first half, while phone net additions improved by more than 500,000 from the prior year, he said.
Revenue growth and customer retention
Skiadas said Verizon is pursuing a “growth transformation, not just a cost transformation,” centered on its customer value proposition, simplified plan offerings and loyalty programs. He said the company’s churn declined by 5 basis points year over year and that retention gains are an important driver of its volume-growth plans.
Mobility and broadband service revenue grew 2.8% in the second quarter, an improvement of 120 basis points sequentially, Skiadas said. Verizon expects its growth rate to approach 3% in the third quarter and reach approximately 4% in the fourth quarter.
While Verizon continues to expect wireless service revenue to be around flat for the full year, Skiadas said the company expects wireless service revenue to grow in the second half. He cited improved phone net additions and easing promotional-amortization headwinds as contributors to the outlook.
The company’s Simplicity offering, launched in mid-June alongside Verizon’s World Cup-related marketing efforts, separates handset pricing from service pricing and gives customers device and plan choices, Skiadas said. He said the offering has performed particularly well among one-line and two-line accounts, where Verizon has historically under-indexed.
Verizon expects to finish in the upper half of its 750,000 to 1 million net-add guidance range, he said. The company also expects account growth in the third quarter.
On handset upgrades, Skiadas said Verizon’s upgrade volumes declined more than 20% in the second quarter. He attributed the decline partly to customers keeping phones longer, with the average upgrade cycle reaching about 43 months, two months longer than a year earlier. Verizon also has used more targeted retention efforts rather than broad device subsidies, he said.
Cost program and financial targets
Verizon’s $9 billion cost program, consisting of $5 billion in operating-expense savings and $4 billion in capital-expenditure savings, remains on track, according to Skiadas. Cost actions include modernizing the network, removing legacy copper infrastructure, improving advertising and marketing efficiency, operating with a leaner workforce and using artificial intelligence in areas such as network operations and customer care.
Cost of acquisition fell 15% year over year in the second quarter, while cost of retention declined 17%, Skiadas said. He said the company sees additional cost-reduction opportunities in 2027 and 2028, including network modernization, Frontier-related synergies, AI deployment, technology platforms and real estate.
Skiadas said Verizon is seeking to ensure cost reductions do not undermine service quality or customer experience. The savings, he said, are intended to support operational efficiency, customer investments, the company’s revenue transition and shareholder returns.
Following its first-half results, Verizon raised its full-year adjusted EPS growth outlook to 6% to 7% and its free-cash-flow growth outlook to 9% to 10%, Skiadas said.
Broadband, fiber and AI Connect
Verizon is also emphasizing convergence between wireless and broadband services following its Frontier transaction. Skiadas said customers with both Verizon mobility and broadband services have 30% lower mobility churn than customers with a single Verizon product. About 20% of Verizon’s mobility base currently has a Verizon broadband service, leaving room for further cross-selling, he said.
The company recently introduced Verizon One, a converged offering priced at $70 that includes mobility and broadband, taxes and fees, according to Skiadas.
Verizon expects to exceed 32 million fiber passings this year and remains on track toward its medium-term goal of 40 million to 50 million passings. Its capital-spending plan for the year remains $16 billion to $16.5 billion, including investments related to AI infrastructure opportunities in 2026, Skiadas said.
He highlighted AI Connect as a new revenue stream beyond Verizon’s core operations. Verizon announced a long-term Google agreement valued at more than $1 billion and has additional opportunities in its pipeline, Skiadas said. The business can include power, space and cooling in central offices, dark-fiber routes, and wave or lit services.
Management views AI Connect as a multibillion-dollar opportunity that could become meaningful to results in 2027, although Skiadas cautioned that deal economics vary by customer.
Capital allocation
Skiadas said Verizon’s capital-allocation priorities are investment in the business and spectrum, the dividend, balance-sheet improvement and share repurchases. The company acquired $3.2 billion of AWS-3 spectrum in Auction 113, he said.
Verizon has raised its dividend for 20 consecutive years, and Skiadas described its commitment to the dividend as “ironclad.” The company had repurchased $3.5 billion of stock through June as part of a plan to repurchase up to $4.5 billion during the year.
Verizon also paid down Frontier-related debt six months early and expects to reach its 2.5-times long-term leverage target in the 2027 timeframe, Skiadas said.
About Verizon Communications (NYSE:VZ)
Verizon Communications Inc is a telecommunications company that provides wireless communications, broadband, and related technology services. Its offerings include mobile voice and data plans, 5G connectivity, fixed wireless access, fiber-optic internet through Verizon Fios, home services, and connected-device solutions.
Through Verizon Business, the company serves enterprises, government agencies, and other organizations with communications networks, managed connectivity, cybersecurity, cloud and edge-computing services, unified communications, and Internet of Things solutions.
