Verizon Communications Inc. (VZ  ) reported first-quarter 2026 results on Monday, with the stock trading higher following the release, as adjusted earnings topped expectations while revenue came in slightly below estimates. Adjusted EPS was $1.28, beating the $1.20 estimate, while revenue of $34.4 billion missed the $34.836 billion consensus. GAAP diluted EPS rose 4.3% year over year to $1.20, and net income increased 3.3% to $5.1 billion.

Strong Profitability And Cash Flow Growth

Total operating revenue grew 2.9% year over year to $34.4 billion. Adjusted EBITDA increased 6.7% to $13.4 billion, marking a record quarterly level, while adjusted EPS growth of 7.6% was the strongest since 2021.

Cash flow from operations was $8.0 billion, up 2.6%, and free cash flow rose 4.0% to $3.8 billion.

Capital expenditures totaled $4.2 billion. Verizon ended the quarter with $142.5 billion in total unsecured debt and $130.1 billion in net unsecured debt.

The company repurchased $2.5 billion in shares and remains on track for at least $3.0 billion for the full year. It also paid down roughly half of Frontier's debt and expects to repay the remainder by year-end.

Mobility, Broadband And Subscriber Trends

Mobility and broadband service revenue rose 1.6% to $22.9 billion, impacted by a January outage expected to mark the year's low point.

Wireless equipment revenue increased 5.2% to $5.7 billion. Verizon added 55,000 postpaid phone subscribers, 115,000 prepaid users, and 341,000 broadband customers, bringing its total to 16.8 million connections.

Consumer revenue was $26.5 billion with a 29.2% margin, while Business revenue was $7.4 billion with an 11.9% margin.

"Our first-quarter 2026 results show that our turnaround is not only progressing, it is gaining momentum," said Verizon CEO Dan Schulman.

Updated Outlook And Capital Allocation

Verizon raised its full-year adjusted EPS guidance to $4.95 to $4.99 from $4.90 to $4.95, above the $4.90 estimate, and expects postpaid phone net additions in the upper half of its 750,000 to 1 million range.

It reaffirmed mobility and broadband service revenue growth of 2.0% to 3.0%, operating cash flow of $37.5 billion to $38.0 billion, and free cash flow of at least $21.5 billion.

Despite momentum, management flagged ongoing macro and competitive uncertainties, noting guidance reflects a "prudent view" of the environment.

Conference Call Highlights

On the call, Verizon highlighted improvements in customer metrics, with postpaid phone churn at 90 basis points and below 85 basis points in March, and acquisition and retention costs down by about 35%.

The company is targeting $5 billion in operating expense savings in 2026 and more than $1 billion in Frontier synergies by 2028, while expanding its fiber footprint to over 32 million passings this year.

Management said it is in advanced discussions with hyperscalers, cloud providers, and enterprises to integrate its fiber and 5G assets into AI infrastructure.

These initiatives, spanning data center connectivity and support for AI training and inference, could unlock multi-billion-dollar revenue opportunities, with more details expected within three to six months.

VZ Price Action: Verizon Communications shares were up 2.76% at $47.66 at the time of publication on Monday. The stock is approaching its 52-week high of $51.68, according to Benzinga Pro data.