The indicators behind Verizon’s strategic shift

(SeaPRwire) –   Good morning. Verizon is beginning to demonstrate what results when customer experience is positioned as a core growth strategy.

The telecommunications giant is in the middle of a multi-year transformation to a leaner, AI-powered operating model. During the company’s Q1 earnings call held Monday, Dan Schulman — who has served as chief executive since October — called churn “the clearest measure” of whether the company’s transformation efforts are resonating with customers.

Verizon, ranked No. 30 on the 500, posted its first positive first-quarter net gain in postpaid phone subscribers since 2013, adding a net 55,000 postpaid phone customers. Postpaid customers, who pay monthly bills under contract, are widely viewed as the most valuable segment because they carry higher average bills and are far less likely to switch to other providers.

Consumer postpaid phone churn hit 90 basis points in Q1, a 5-basis-point sequential improvement from Q4, and dropped even further in March to below 85 basis points. “That is a meaningful improvement both sequentially from Q4 and across the quarter itself, and it has reversed the upward pressure on churn we have seen over the past several years,” Schulman said.

Lowering churn makes Verizon’s “marketing dollars work harder because we are not simply replacing customers who leave; we are growing a more stable customer base,” he said. The company is no longer primarily dependent on costly promotions to drive growth, and is instead focusing on a “disciplined, repeatable, and fiscally responsible” approach, he added.

Schulman, the former CEO of PayPal who previously served as Verizon’s lead independent director, succeeded Hans Vestberg in the top role. He was tasked with leading Verizon’s next phase of growth, which is focused on customer experience and expanding financial performance. According to analysts, Verizon struggled to lay out a clear strategy for market positioning, branding, and pricing under Vestberg’s leadership.

Customer metrics move to center stage

Schulman highlighted three customer-centric core metrics: churn, customer acquisition, and customer lifetime value (CLV). These metrics, which originated in marketing functions, have grown to become critical to finance strategy and overall bottom-line results.

“Our customer acquisition cost (CAC) and retention costs in March fell roughly 35% compared to the end of Q4, and we expect to keep these costs at lower levels moving forward,” Schulman said. “These trends in churn and unit economics are lifting our customer lifetime value and are already feeding through to our bottom line and our free cash flow,” he added.

Morningstar Equity Director Michael Hodel wrote in a Monday analyst note that although Verizon’s wireless customer churn remains elevated, a reflection of the competitive industry environment, the company is “doing a much better job attracting new customers than it was a year ago.” Lower pricing has helped drive customer acquisition, Hodel said. Morningstar kept its $53 fair value estimate and narrow economic moat rating for Verizon unchanged.

Telecom CFOs track postpaid net adds, churn, CAC, and CLV as key drivers of revenue guidance and capital allocation decisions. Verizon still recorded a net loss of postpaid phone subscribers in the quarter, but the net loss was only 35,000, a 321,000 improvement from the net loss one year prior, CFO Tony Skiadas said on the call. The improvement came from a healthier mix of more genuine new customers joining the network and fewer existing customers leaving. “While there is more work to be done on customer experience, which is the largest component of our transformation plan, we’re pleased to see early signs of progress toward our goals,” he said.

Total operating revenue for Q1 was $34.4 billion, up 2.9% year-over-year. Adjusted EPS hit $1.28, beating analyst estimates, and rose 7.6% year-over-year, marking the highest growth rate in more than four years. Consolidated net income came in at $5.1 billion, up 3.3% year-over-year. Verizon raised its 2026 adjusted EPS growth forecast to 5%–6%. Its stock gained roughly 1.5% at Monday’s close, after climbing as much as 4.5% earlier in the trading session. 

Schulman noted that there is still work ahead. “We entered 2026 with a clear set of priorities, a meaningful step improvement in guidance, and a realistic plan,” he said. 

Sheryl Estrada
sheryl.estrada@.com