Today we check back in and take a look at the just-reported earnings out of Verizon Communications Inc. (VZ). We know that the company is debt-laden and many see that as a risk, though with rates continuing to come down over time the debt will be more manageable as future financing will be more affordable. We like Verizon stock for a buy as it has strong cash flow, and a well covered and growing dividend - with this report, we got another dividend increase. We like it a lot for income. Oh, and it is going to buy back up to $25 billion worth of shares. This is bullish. Let us discuss.

Verizon Q4 Headline results strong

The top-line revenues were in line with our expectations. The revenue figure hit our expectation for $36.3-$36.7 billion. Revenue came in at $36.4 billion. It was up 2% from last year, some may see that as disappointing growth, but that was in line with expectations. What about customer additions in Q4? We expected another quarter of 40,000+ Fios net additions. We were also once again expecting postpaid gains and wireless postpaid phone gross additions to increase in the single digits year-over-year. We were also looking for churn to be below 1% here. 

In wireless, we saw the 22nd quarter in a row of wireless service revenue growth with 1.1% wireless service revenue growth from last year to $21.0 billion. We also saw better equipment revenue of $8.2 billion, up 9.1% from last year, driven by new phone offerings. Postpaid phone net adds blew away our expectations for 450,000-525,000 as total postpaid phone net additions hit 616,000, up from 504,000 a year ago. This was the best quarter of postpaid phone net additions since 2019. We continue to see broadband strength, and expect that to continue in 2026. Verizon saw 372,000 broadband net adds, which was above our expectations. There were also 319,000 fixed wireless net additions, which was also above expectations. And the Fios additions were above expectations for 40,000+ at 67,000. Folks this was an incredible quarter overall, no mistake about it.

Business has been an issue over the years but there was a bit more favorable of an outlook this quarter, but we still expected weakness. Indeed, total business revenue was $7.36 billion, down year-over-year from $7.50 billion, but up sequentially. Business operating margin also improved from last year to 8.1% from 7.9%. For the entire year, business revenues were still down but the heavy bleeding out of revenues has slowed. Revenue was $29.1 billion in 2025, down from $29.5 billion. 

As for overall company-wide operating income, it hit $7.49 billion, with $6.89 billion in consumer operating income and $0.59 billion in business operating income. On the adjusted EBITDA line we were targeting $12.0 billion. Adjusted EBITDA was $11.9 billion, right about at expectations. For the year 2025, adjusted EBITDA was a strong $50 billion. Solid year overall, and we think it merits the stock trading at a premium. On a per-share basis, assuming our projections captured the results with relative precision, we saw EPS hitting $1.08-$1.13 for Q4, and the adjusted EPS hit $1.09, in line with our expectations.

We talk a lot about the strong cash flow in our Verizon coverage. Well in 2025, the company eclipsed $20 billion in free cash flow, hitting $20.1 billion and rising from $19.8 billion last year. A strong year. As for the debt, total unsecured debt is $131.1 billion, rising $13.2 billion from the start of 2025. The company's net debt came down to $110.1 billion to end the year, down from $113.7 billon. This is a 2.2X debt-to-adjusted EBITDA ratio.

Folks, we think Verizon deserves to trade at a premium on this solid quarter and the cash flow strength. There was another dividend hike and a large buyback. Shares had gone a bit on sale in recent weeks, but shares look set to rebound. The company is doing just fine. As we look ahead, we expect Verizon's turnaround to continue. Up to 1 million new retail postpaid adds could be had in 2026, massive growth from 2025 if hit. Service revenues should grow 3%, and adjusted EPS will push $5.00, or 5% growth from 2024. And the all-important free cash flow figure was guided for at least $21.5 billion, which is a $1.4 billion increase over 2025, and the best it will have been in 6 years if hit. We reiterate a buy rating on Verizon shares.

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