Verizon's Chief Financial Officer, Tony Skiadas, presented the company's financial performance and strategic initiatives at Citi's 2026 Global TMT Conference. The presentation highlighted Verizon's strong financial results and growth transformation efforts.
Verizon's market capitalization stands at $209.44 billion, with a P/E ratio of 13.15. The stock has delivered a year-to-date return of 29.98%, trading near its 52-week high of $51.68. The company has a dividend yield of 5.61%, with 21 straight years of dividend increases.
In the second quarter, Verizon achieved a company-record adjusted EBITDA margin of 40.1%. Adjusted EPS rose 6.6%, and cash flows increased 24% in the quarter and 16% in the first half. Total capital returned to shareholders reached $9.4 billion, up 60% year-over-year. Through June, Verizon repurchased $3.5 billion out of $4.5 billion authorized for the year.
The company raised its full-year adjusted EPS guidance to 6% to 7% and free cash flow guidance to 9% to 10%. Mobility and broadband service revenue grew 2.8% in Q2, up 120 basis points sequentially. Q3 growth is expected to approach 3%, and Q4 growth is projected to be about 4%. Wireless service revenue is expected to be roughly flat for the full year, with growth improving in the second half.
Verizon's $9 billion cost transformation program includes $5 billion in operating expense savings and $4 billion in capital expenditure savings. The cost of acquisition fell 15%, and the cost of retention fell 17%. The company aims for a long-term leverage target of 2.5x by 2027.
The capital program for the year is $16 billion to $16.5 billion, with spectrum investments including the $3.2 billion AWS-3 spectrum purchase in Auction 113. Combined mobility and broadband net adds topped 1 million in the first half, with phone net adds improving by more than 500,000 year-over-year. Churn fell 5 basis points year-over-year.
Verizon's convergence and broadband strategy includes the launch of Verizon One, priced at $70, which includes mobility, broadband, taxes, and fees. Fiber deployment targets more than 32 million passings for the year, with 40 million to 50 million passings expected over the medium term. The Frontier acquisition is expected to generate at least $1 billion of synergies by 2028.
The company's AI infrastructure initiatives, including Verizon AI Connect, are expected to become meaningful in results starting in 2027. Verizon has long-term deals with Google, valued in excess of $1 billion, and Corning for consumer fiber and AI infrastructure support.
Skiadas emphasized Verizon's growth transformation, not just a cost transformation, and the company's focus on driving growth through targeted retention. He noted the significant rigor around the cost-cutting program to ensure it does not weaken growth plans, and the company took bold steps in this regard.
Verizon sees satellite as complementary to its business but does not view satellite MVNOs as an option, as they do not add to its distribution or give it the ability to sell something it cannot already do today.
