TLDR
- Q1 2025 adjusted EBITDA hit a record $12.6 billion, up 4% year over year.
- Adjusted EPS rose 3.5% to $1.19; free cash flow increased to $3.6 billion.
- Postpaid phone subscribers fell by 356,000 due to recent pricing changes.
- Prepaid net adds reached 137,000, best since TracFone acquisition.
- Price lock and equal trade-in offers aim to curb churn in H2.
Verizon Communications (NYSE: VZ) closed at $43.19 on April 22, up 0.61% after reporting Q1 2025 results. The company delivered its highest-ever adjusted EBITDA of $12.6 billion, with a 4% year-over-year increase. It also saw adjusted EPS rise 3.5% to $1.19 and free cash flow jump by over $900 million to $3.6 billion. Verizon’s next earnings report is scheduled for July 21, 2025.
Verizon Communications (NYSE: VZ)
Solid Financials and 5G Network Leadership
Verizon’s wireless service revenue rose 2.7%, reaching the high end of its forecast. Prepaid performance was strong with 137,000 net adds, the best since acquiring TracFone. Broadband net additions of 339,000 were led by growth in Fios and fixed wireless services.
The company also added 67,000 business phone connections, although federal account pressure weighed on broader business gains. RootMetrics again ranked Verizon’s 5G network as the best and most reliable in the U.S., cementing its reputation for service quality.
Consumer Churn and Postpaid Struggles
Despite financial improvements, Verizon lost 356,000 net postpaid phone subscribers in Q1. This loss, primarily attributed to pricing actions, nearly erased Q4 2024 gains when Verizon added 367,000 subscribers.
Total gross additions in Q1 reached 1.7 million but were down 1% year over year. Verizon’s pricing changes triggered higher churn, a continuing issue that the company hopes to stabilize in the second half of the year.
Customer Retention Moves
To address churn, Verizon introduced two new features this month. First, it launched a three-year price lock on wireless plans, available to new and existing customers—though it excludes extra fees and perks.
Second, Verizon now allows existing customers to access the same phone trade-in deals as new customers. While these steps could boost loyalty, they will also raise customer acquisition and retention costs.
Economic and Policy Headwinds
Verizon faces macroeconomic uncertainty and potential tariffs that may impact handset prices and network equipment costs. Rising costs and economic slowdown risks could push consumers toward cheaper plans or alternative providers, adding pressure to Verizon’s premium service strategy.
Despite these challenges, Verizon’s YTD stock return of 11.68% outpaces the S&P 500’s 10.10% decline. Over the past year, VZ gained 19.43% compared to the index’s 5.53%. However, its five-year performance remains flat, reflecting industry pressures and slow subscriber growth.
Verizon’s cash generation remains a bright spot, with $18.97 billion in levered free cash flow over the trailing 12 months. Still, high debt levels and stiff competition suggest that customer retention, not cost savings, will be key to sustaining performance through 2025.
