Verizon Sees Unprecedented Wireless Growth, Shares Rise
A Boost from Customizable Plans and AI-Powered iPhones
Verizon Communications has reported its strongest quarterly wireless subscriber growth in five years, driven by the popularity of its customizable myPlan and Black Friday deals, as well as trade-in offers for the AI-powered iPhone 16 series. This impressive growth sent the company’s shares up by about 1%, allowing investors to overlook annual profit and free cash flow forecasts that fell short of Wall Street estimates.
Investing in 5G and Fixed Wireless Services
Verizon has been investing heavily in the C-band spectrum, prized for its balance of speed and range, to enhance its 5G offering and outpace rivals AT&T and T-Mobile. This significant spending is crucial to achieving the company’s goal of securing up to 9 million subscribers for its fixed wireless service by 2028.
Capitalizing on Artificial Intelligence
On Friday, Verizon unveiled Verizon AI Connect, a suite of products and solutions designed to help businesses manage artificial intelligence workloads at scale. This move is aimed at capitalizing on the growing use of AI technology.
Financial Projections and Performance
Verizon expects its 2025 adjusted profit to grow between 0% and 3%, with the midpoint falling below analysts’ estimates of 2.7% growth. Free cash flow, a key metric for determining dividend payments, is expected to be between $17.5 billion and $18.5 billion this year, with the midpoint below estimates of $18.44 billion.
Wireless Subscriber Growth and Revenue
In the fourth quarter, Verizon added 568,000 monthly bill-paying wireless subscribers, surpassing FactSet estimates of 487,500 additions. The company benefited from price increases implemented in 2024 and the popularity of myPlan, which offers streaming perks like Disney+, Hulu, and Max at an extra cost. Wireless equipment revenue grew about 1% to $7.5 billion in the fourth quarter, thanks to higher device upgrade volumes. Overall revenue was $35.7 billion, slightly above estimates of $35.32 billion.
Industry Insights and Analysis
“The wireless market is highly competitive, and Verizon has recently increased handset promotional activity and simplified pricing to attract and retain consumer subscribers,” noted Dave Heger, communications services analyst at Edward Jones. More than half of Verizon’s mobile customer base is now on myPlan, highlighting the plan’s appeal to customers.
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