The telecom giant just delivered its strongest quarter in years, and Wall Street is taking notice
Verizon Communications kicked off the week with a result that caught Wall Street’s attention in the best possible way. The telecom giant reported first-quarter earnings that topped analyst expectations, added wireless subscribers during a period that has historically been one of its weakest, and raised its financial outlook for the rest of 2026. Shares jumped more than 4% ahead of today’s opening bell, reaching $48.33, as investors responded to what the company described as a turnaround gaining real momentum.
The headline numbers were straightforward: adjusted earnings per share came in at $1.28 for the quarter, a 7.6% increase year over year and well above the $1.21 analysts had been expecting. Revenue reached $34.4 billion, up 2.9% from the same period a year ago, though it came in slightly below the $34.82 billion consensus forecast. The minor revenue shortfall did little to dampen enthusiasm given the strength of the earnings beat and what it signals about the direction of the business.
The subscriber number that changed everything
Perhaps the single most striking figure in the report was not the earnings beat but the subscriber count. Verizon added 55,000 net postpaid phone customers in the first quarter, the first time that figure has been positive in a Q1 since 2013. Analysts had actually been modeling for a loss of more than 88,000 postpaid phones during the period, making the swing more than 140,000 better than expected and a year-over-year improvement of more than 344,000.
The company also added 341,000 broadband subscribers during the quarter, including 214,000 fixed wireless access net additions and 127,000 fiber net additions, bringing its total broadband subscriber base to approximately 16.8 million. On the prepaid side, Verizon grew its customer base for the seventh consecutive quarter, driven primarily by its Visible and Total Wireless brands.
Consumer postpaid phone churn for the quarter was 0.90%, an improvement of 5 basis points compared to the fourth quarter of last year, and the trend continued to improve as the quarter progressed, with March churn falling below 0.85%. That kind of sequential churn improvement, particularly heading into what the company has identified as its most ambitious period of operational transformation, gave management the confidence to revise guidance higher.
Guidance raised and a new Verizon taking shape
Verizon lifted its full-year 2026 adjusted earnings per share guidance to a range of $4.95 to $4.99, representing projected growth of 5% to 6% and comfortably ahead of the $4.90 per share analysts had been expecting at the midpoint. The company reaffirmed its mobility and broadband service revenue growth target of 2% to 3% for the full year, with the first quarter expected to represent the low point of the year. Full-year free cash flow guidance of approximately $21.5 billion or more was also reaffirmed.
Adjusted EBITDA for the quarter reached $13.4 billion, a 6.7% increase year over year and a record high for the company, with margin expanding 140 basis points. Free cash flow came in at approximately $3.8 billion, up 4% year over year, and the company completed $2.5 billion in share repurchases during the quarter, marking its first buyback program in more than a decade.
The transformation plan driving the results
Behind the numbers is a sweeping internal overhaul the company has been executing since new CEO Dan Schulman took the helm. The program spans 10 major workstreams covering everything from AI integration and customer experience redesign to network cost reduction and workforce restructuring. The company has already reduced headcount by 13,000 and is targeting $5 billion in operating expense savings for 2026, with progress ahead of schedule in areas including network operating costs, advertising efficiency and acquisition and retention spending.
Cost of acquisition and retention fell approximately 35% in March relative to the end of the fourth quarter, a structural shift the company attributes to a more disciplined, micro-segmentation approach rather than a reliance on blanket device promotions. The company says it has seen a 1,280 basis point improvement in customer satisfaction scores year over year connected to early AI deployment in its customer service operations, and that 85% of network issues are now being resolved autonomously before customers are even aware of them.
The Frontier Communications acquisition, which closed on January 20, 2026, is progressing on schedule, with run-rate operating cost synergies of over $1 billion targeted by 2028. The company has already paid down approximately half of Frontier’s debt since the deal closed and expects to repay substantially all of it by year-end. Verizon also raised its quarterly dividend to $0.7075 per share in January, marking its 20th consecutive year of dividend increases and maintaining a yield of approximately 6.1% at current prices.
Key risks investors are still watching
The strong quarter did not erase all of the concerns surrounding the stock. Verizon still faces competitive pressure in the wireless market, elevated leverage following the Frontier acquisition, and macroeconomic uncertainties that could weigh on consumer device upgrade activity and spending. A Supreme Court case involving more than $100 million in FCC fines related to the handling of customer location data remains an unresolved legal overhang.
Some analysts have also raised questions about whether the company can sustain its improved subscriber trends in an increasingly promotional competitive environment.
Verizon’s stock trades at a price-to-earnings ratio of roughly 11.46 times, a level analysts at InvestingPro have characterized as undervalued given the company’s earnings trajectory and the 18% shareholder return delivered over the past year. With the Frontier integration underway and the transformation program still in its early stages, today’s results suggest the company’s revival has legs, even if the full picture will not be clear until the year plays out.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. The author and publication are not registered investment advisors and do not provide personalized investment recommendations.