Verizon raises 2025 EBITDA and free cash flow outlook as Frontier integration advances

Earnings Call Insights: Verizon Communications Inc. (VZ) Q2 2025

Management View

Hans E. Vestberg, Chairman & CEO, reported “strong second quarter” performance, highlighting that “wireless service revenue of $20.9 billion” was up 2.2% year-over-year and adjusted EBITDA reached $12.8 billion, a 4.1% increase, marking “another record for the best reported quarter.”
Vestberg emphasized that “free cash flow of $5.2 billion for the quarter” brought “year-to-date free cash flow to $8.8 billion, an increase of over $300 million compared to the first half of 2024.” He noted continued leadership in network quality, rapid C-band deployment, and surpassing 5 million fixed wireless subscribers.
The CEO stated, “Given our financial performance and the momentum in the first half of the year, we are raising our full year guidance for adjusted EBITDA and adjusted EPS. We’re also raising our guidance for free cash flow for the year.”
Vestberg highlighted AI-powered customer experience enhancements, a segmented market strategy, and a major UK deal to deploy private fiber networks as key growth drivers. He also confirmed that the regulatory approval process for the pending Frontier acquisition “is progressing as planned,” with an update promised upon closing.
CFO Anthony T. Skiadas said, “The second quarter demonstrated our ability to deliver strong financial results even in the period of elevated promotional activity and broad economic uncertainty.”
Skiadas added, “We are raising our 2025 free cash flow guidance to a range of $19.5 billion to $20.5 billion. The increase is driven by an estimated benefit of $1.5 billion to $2 billion from their recently enacted tax legislation as well as the disciplined operational execution that drove our strong adjusted EBITDA and free cash flow performance in the first half of the year.”

Outlook

Management raised full-year guidance for adjusted EBITDA growth to 2.5% to 3.5%, an increase of approximately $125 million at the midpoint.
Adjusted EPS growth guidance was increased to a range of 1% to 3%.
Free cash flow guidance was raised to a range of $19.5 billion to $20.5 billion, with the increase attributed to operational strength and tax legislation benefits.
Wireless service revenue and CapEx guidance remain unchanged.
Vestberg indicated, “As we near the closing of Frontier acquisition, we will provide a comprehensive update on our strategy, broadband expansion and capital allocation considering all stakeholders.”

Financial Results

Consolidated revenue for Q2 was $34.5 billion, up 5.2% year-over-year.
Wireless service revenue was $20.9 billion, rising 2.2% year-over-year, with consumer ARPU up 2.3%.
Adjusted EBITDA of $12.8 billion marked the highest reported quarterly result, up 4.1% from the prior year.
Adjusted EPS was $1.22, up 6.1% year-over-year.
Free cash flow for the first half reached $8.8 billion, a 3.6% increase year-over-year.
Net unsecured debt stood at $116 billion, a $6.9 billion improvement year-over-year. The net unsecured debt to consolidated adjusted EBITDA ratio was 2.3x, in line with the prior quarter.

Q&A

Ben Swinburne, Morgan Stanley, asked about capital allocation and consumer wireless outlook. Vestberg said, “our capital allocation priorities are unchanged,” but will be revisited post-Frontier closing, and affirmed, “our ambition… doing better this year, is still valid.” On churn, Skiadas replied, “we’re focused on reducing churn in a financially disciplined manner,” citing AI initiatives and C-Band deployment.
John Christopher Hodulik, UBS, questioned postpaid ARPU growth and upgrades. Vestberg said, “We have many levers… We still believe that we have a good run rate on that.” Skiadas added, “we absorbed the higher upgrades… and we still produced strong EBITDA and cash flow in the quarter.”
Sebastiano Carmine Petti, JPMorgan, asked about free line contribution and prepaid migration. Vestberg stated, “The free lines was insignificant… it was a really good execution by the team.” Skiadas noted, “we now expect prepaid will be a contributor to service revenue growth in the second half of 2025.”
James Edward Schneider, Goldman Sachs, asked about broadband market trends. Vestberg commented, “Fios has been fairly consistent… The churn is very low, performing really well.” On fixed wireless, he said, “I’m pretty certain we will do better on broadband in the second half this year than we did in the first.”
Michael Ian Rollins, Citigroup, asked about convergence and EBITDA. Vestberg detailed, “we have owners economics on mobility and broadband… we have a huge opportunity as for convergence.” Skiadas highlighted operating leverage and cost efficiency, with “the voluntary separation program… now behind us.”
Other analysts raised topics including go-to-market strategy segmentation, fixed wireless deployment pace, spectrum strategy, subscriber acquisition costs, customer experience enhancements, cost opportunities, BEAD program participation, and business segment margin improvements. Management consistently emphasized financial discipline and operational efficiency, while noting no significant changes in strategic direction.

Sentiment Analysis

Analysts maintained a neutral to slightly positive tone, probing for clarity on guidance raises, churn mitigation, capital allocation, and competitive positioning. Questions often focused on sustainability of momentum, implications of the Frontier deal, and long-term margin drivers.
Management’s tone was confident in both prepared remarks and answers, frequently referencing “disciplined execution,” “momentum,” and “resilient business model.” Defensive language was minimal, with most responses highlighting ongoing improvements and future opportunities. Vestberg repeatedly stated, “we are committed” and “we feel good about the progress.”
Compared to the previous quarter, the level of confidence and specificity in guidance and operational execution appeared higher, with greater emphasis on cost savings, tax reform benefits, and the impact of forthcoming integration of Frontier assets.

Quarter-over-Quarter Comparison

The current quarter saw an explicit upward revision in full-year adjusted EBITDA, EPS, and free cash flow guidance, compared to reaffirmations in the previous quarter.
Management reported accelerated fixed wireless and fiber subscriber growth, while reaffirming disciplined customer acquisition and retention strategies.
Analysts in both quarters focused on guidance credibility and the sustainability of operational improvements, but this quarter included more questions about capital allocation flexibility and the integration timeline for Frontier.
Management’s confidence strengthened, with more concrete references to tax reform windfalls and operational levers, compared to the prior quarter’s broader focus on transformation and stabilization.
Strategic priorities remained consistent, but language around AI-powered customer experience, cost reductions, and convergence intensified.

Risks and Concerns

Management acknowledged persistent public sector pressures and continued elevated consumer postpaid phone churn, attributing the latter to “lingering effects of pricing actions and ongoing pressure from federal government accounts.”
Skiadas noted, “we continue to see elevated competitor promotional activity” and confirmed expectations for public sector pressures “to persist in the second half of the year.”
There was recognition that fixed wireless subscriber growth could moderate as C-band build-out moves into less dense markets.
Regulatory approval for the Frontier acquisition remains a procedural risk, though the process is reportedly on track.
Management outlined ongoing mitigation efforts, including AI-driven customer retention initiatives, segmented market strategies, and continued network investment.

Final Takeaway

Verizon delivered a record-setting second quarter, raising full-year guidance for adjusted EBITDA, EPS, and free cash flow on the strength of wireless service revenue growth, robust broadband performance, and disciplined cost management. The company expects benefits from tax reform and the pending Frontier acquisition to further accelerate its fiber strategy, while ongoing investments in network quality, customer experience, and AI-powered innovation underpin its commitment to sustainable long-term growth.

Read the full Earnings Call Transcript