Verizon Charts Aggressive Turnaround After Strong Q4, Unveils $25 Billion Buyback and Dividend Hike
NEW YORK – Verizon Communications Inc. (NYSE: VZ) struck a defiantly optimistic tone in its fourth-quarter earnings call, showcasing a significant rebound in subscriber numbers and detailing a comprehensive plan to reshape the telecom giant. The results, which exceeded expectations, mark a potential inflection point for a company that has recently ceded market share to rivals.
New CEO Daniel Schulman, now 100 days into the role, presented a quarter that delivered over 1 million net additions across mobility and broadband—the company's strongest quarterly performance since 2019. A standout was the 616,000 postpaid phone net adds, the highest in six years. Schulman attributed the success to "fiscally responsible" market moves and a renewed focus on execution.
"Our fourth quarter results show that we can compete effectively and win when we move with speed and consistency," Schulman stated, directly addressing past criticisms. "We are not satisfied with ceding market share."
The turnaround narrative is built on two pillars: aggressive cost transformation and a strategic shift towards "value-based" growth over what Schulman termed "empty price increases." The company announced a target of $5 billion in operational expense (OpEx) savings for 2026, partly achieved through a workforce reduction of 13,000 in Q4. Capital expenditures are also being scrutinized, with a guided range of $16-$16.5 billion for 2026, down from $17 billion in 2025, by focusing spending solely on core mobility and broadband initiatives.
Financially, Verizon met its 2025 guidance, with full-year adjusted EBITDA reaching $50 billion. For 2026, it forecasts adjusted EPS of $4.90 to $4.95, representing 4-5% growth, and free cash flow of at least $21.5 billion.
Strategic Shifts and Capital Allocation
The centerpiece of Verizon's new strategy is convergence—bundling wireless, fiber, and fixed wireless access (FWA). The recently closed acquisition of Frontier Communications is pivotal here, adding over 9 million fiber passings and what Schulman called a "huge cross-sell opportunity." The company raised its medium-term fiber footprint target to 40-50 million passings.
In a major commitment to shareholders, the Board authorized a new $25 billion share repurchase program to be executed over three years, with at least $3 billion slated for 2026. It also announced a dividend increase of $0.07 per share annually, marking the 20th consecutive year of dividend growth.
Schulman emphasized a cultural shift, vowing to eliminate customer pain points and complexity. "We let our customers down," he said, referencing a recent network outage. "The #1 rule of getting out of a hole is stop digging." He explicitly promised an end to price hikes without added value, a practice he blamed for elevated churn, even though it creates a 180-basis-point revenue headwind in 2026.
Analyst and Market Reaction
CFO Anthony Skiadas provided granular detail, noting that while 2026 wireless service revenue is expected to be flat due to lapping prior price increases, the focus on volume growth and convergence sets up a stronger profile for 2027. He also highlighted that synergy estimates from the Frontier integration have doubled to over $1 billion by 2028.
During the Q&A, analysts probed the sustainability of the subscriber momentum and customer lifetime value (LTV). Schulman expressed confidence, citing churn reduction as a key lever. "If we reduce churn by 5 bps, we are already halfway to our [net add] target," he said, outlining plans to improve customer experience and leverage convergence bundles, which see a 40% lower churn rate.
User Commentary
Sarah Chen, Telecom Analyst at Horizon Insights: "This is the most coherent and actionable strategy Verizon has presented in years. The focus on operational efficiency and leveraging the Frontier assets for convergence is a textbook play in today's market. The $5 billion cost target is ambitious but necessary. The real test will be executing this cultural transformation without losing more ground to T-Mobile and AT&T in the meantime."
Marcus Johnson, Portfolio Manager at Steadfast Capital: "The capital return announcement is a powerful signal. A $25 billion buyback and a dividend raise amidst a 'transformation' shows confidence in the cash flow story. They're funding shareholder returns with cost cuts, not debt. That's a prudent balance. The guidance for 2026 looks achievable, if not conservative."
Rebecca Torres, Consumer Advocate & Tech Blogger: "Finally, an admission that 'empty price increases' drove customers away! It's about time. But 'customer-obsessed culture' is easy to say in an earnings call. I'll believe it when my bill is simpler and my calls to customer service don't take an hour. The massive layoffs also contradict the 'investing in employees' rhetoric. This feels like a win for Wall Street, but Main Street is still waiting to see the proof."
David Park, Independent Retail Investor: "As a long-term shareholder, I've been waiting for a catalyst. This might be it. The subscriber numbers are finally moving in the right direction, and the buyback should provide solid support for the stock price. The dividend increase is the cherry on top. It seems Schulman is bringing a much-needed sense of urgency from his previous roles."
Verizon enters 2026 with clear, quantified targets: 750,000 to 1 million postpaid phone net adds, significant cost savings, and robust capital returns. The market will now watch to see if this promised turnaround can move from the transcript to tangible, sustained results.