Verizon boosts 2025 EBITDA and cash flow forecasts with Frontier progress

Strong Performance and Strategic Moves in Verizon’s Q2 2025 Earnings Call

Verizon Communications Inc. (VZ) delivered a robust second quarter, with several key highlights showcasing the company's financial strength and strategic direction. CEO Hans E. Vestberg emphasized that the wireless service revenue reached $20.9 billion, marking a 2.2% year-over-year increase. Additionally, adjusted EBITDA hit a record high of $12.8 billion, reflecting a 4.1% growth compared to the previous year.

The CEO also noted that free cash flow for the quarter amounted to $5.2 billion, pushing the year-to-date total to $8.8 billion—an increase of over $300 million compared to the first half of 2024. This performance underscores Verizon’s continued leadership in network quality, as well as its progress in deploying the C-band and surpassing 5 million fixed wireless subscribers.

In addition to these achievements, Vestberg highlighted the company's focus on AI-powered customer experience enhancements, a segmented market strategy, and a significant UK deal to deploy private fiber networks. These initiatives are seen as key drivers of future growth. He also confirmed that the regulatory approval process for the pending Frontier acquisition is progressing smoothly, with an update expected upon closing.

CFO Anthony T. Skiadas echoed the positive sentiment, stating that the second quarter demonstrated Verizon’s ability to deliver strong financial results despite elevated promotional activity and economic uncertainty. He added that the company has raised its 2025 free cash flow guidance to a range of $19.5 billion to $20.5 billion, driven by tax legislation benefits and disciplined operational execution.

Outlook and Guidance Updates

Management has raised its full-year guidance for adjusted EBITDA growth to between 2.5% and 3.5%, with an increase of approximately $125 million at the midpoint. Adjusted EPS growth guidance was also increased to a range of 1% to 3%. Free cash flow guidance was raised to $19.5 billion to $20.5 billion, attributed to operational strength and tax reform benefits.

Despite these updates, wireless service revenue and capital expenditure (CapEx) guidance remain unchanged. Vestberg indicated that as the company nears the closing of the Frontier acquisition, it will provide a comprehensive update on its strategy, broadband expansion, and capital allocation considerations.

Financial Highlights

For the second quarter, consolidated revenue totaled $34.5 billion, a 5.2% increase year-over-year. Wireless service revenue rose to $20.9 billion, up 2.2% from the previous year, with consumer ARPU increasing by 2.3%. Adjusted EBITDA of $12.8 billion marked the highest quarterly result ever recorded by the company.

Adjusted EPS for the quarter was $1.22, representing a 6.1% year-over-year increase. Free cash flow for the first half of the year reached $8.8 billion, a 3.6% increase compared to the same period in 2024. Net unsecured debt stood at $116 billion, showing a $6.9 billion improvement year-over-year, with the net unsecured debt to consolidated adjusted EBITDA ratio remaining at 2.3x.

Q&A Insights

During the earnings call, analysts raised a variety of questions related to capital allocation, consumer wireless outlook, postpaid ARPU growth, and broadband market trends. Vestberg reaffirmed that capital allocation priorities remain unchanged but will be revisited after the Frontier acquisition closes. He also emphasized that the company’s ambition to perform better this year remains valid.

On churn, Skiadas highlighted that the company is focused on reducing churn in a financially disciplined manner, citing AI initiatives and C-Band deployment as key tools. When asked about postpaid ARPU growth, Vestberg stated that the company has multiple levers to drive growth and still believes in a good run rate for ARPU.

Regarding prepaid migration, Vestberg noted that the contribution from free lines was insignificant, and the team executed well. Skiadas added that the company now expects prepaid to contribute to service revenue growth in the second half of 2025.

Sentiment and Strategic Focus

Analysts maintained a neutral to slightly positive tone throughout the call, focusing on the sustainability of Verizon’s momentum, the implications of the Frontier deal, and long-term margin drivers. Management’s responses were confident, frequently referencing “disciplined execution,” “momentum,” and “resilient business model.”

Compared to the previous quarter, the level of confidence and specificity in guidance and operational execution appeared higher, with more emphasis on cost savings, tax reform benefits, and the impact of integrating Frontier assets.

Risks and Mitigation Strategies

Management acknowledged persistent public sector pressures and ongoing challenges with consumer postpaid phone churn, which they attributed to pricing actions and federal government account pressures. Skiadas noted that competitor promotional activity remains elevated and that public sector pressures are expected to persist in the second half of the year.

There is also recognition that fixed wireless subscriber growth could moderate as the C-band build-out moves into less dense markets. The regulatory approval for the Frontier acquisition remains a procedural risk, though the process is reportedly on track.

To mitigate these risks, management outlined ongoing efforts such as AI-driven customer retention initiatives, segmented market strategies, and continued network investment.

Final Takeaway

Verizon’s Q2 2025 earnings call highlighted a record-setting performance, with the company raising full-year guidance for adjusted EBITDA, EPS, and free cash flow. The strength of wireless service revenue growth, robust broadband performance, and disciplined cost management underpin Verizon’s commitment to sustainable long-term growth. The company anticipates additional benefits from tax reform and the pending Frontier acquisition, further accelerating its fiber strategy while continuing to invest in network quality, customer experience, and AI-powered innovation.