- Verizon posted 55,000 postpaid phone net adds in Q1 – its first positive Q1 result in this category since 2013
- New CEO Dan Schulman is doubling down on AI-driven micro-segmentation
- Analysts praised cost-cutting efforts and AI progress but flagged declining ARPU/ARPA and account losses
Verizon CEO Dan Schulman is making good on his promise to turn things around, reporting postpaid phone net additions of 55,000 in Q1 2026 – the first time since 2013 that Verizon has reported positive postpaid phone net adds in the first quarter.
On the other hand, service revenue of $28.76 billion was about 0.8% lower than most analysts were expecting and fixed wireless access (FWA) net adds of 214,000 were lower than the anticipated 264,000. Fiber additions of 127,000 also came in lower than expected. Prepaid net additions were 115,000.
Overall, investors were mostly satisfied with the results, pushing Verizon’s stock up more than 3%, to $47.98.
“We delivered almost half a million net ads across our mobility and broadband platforms. This is a strong continuation of the momentum we established in Q4 of last year, and it is happening while we are also improving the overall quality and economics of our customer relationships,” Schulman said on today’s earnings call.
Verizon closed the acquisition of Frontier in January and sees a “huge” cross-sell opportunity between wireless and fiber, he said. Only 20% of Verizon’s customer base currently has broadband and “we see large go-to-market opportunities for us there,” Schulman said, adding that fiber has inherent advantages over FWA, and it will prioritize fiber where it has coverage.
Schulman is largely viewed as the turnaround guy at Verizon after the company ousted Hans Vestberg as CEO in October following years of customer losses and ceding market share to rivals.
Soon after taking over, Schulman reduced headcount by 13,000, shifted to a more customer-centric strategy and put a heavy emphasis on AI. In fact, he’s been extremely blunt about how AI is going to take away people’s jobs, predicting 20% to 30% unemployment in the jobs market within two to five years.
Notably, Schulman has come in with guns blazing, saying they’re not going to raise prices in mobile without adding value, and they’re not interested in crazy price wars.
No more free handsets
And the idea of handing out a free phone to solve all their customer retention problems? Also gone.
“Not every retention is going to be a free handset. In fact, quite the opposite,” he said. “I think our industry has been too dependent on free handsets being the solution for everything, and I think all of us, and I know for sure Verizon can be much more profitable when we start to micro segment and really listen to what a customer wants and not just give them a free handset for everything.”
By way of example, he said if a customer calls Verizon and says they’re getting bad service in their home, in the past Verizon would send them a free handset so they don’t jump ship. That costs the carrier something like $1,000. However, “if we had listened and sent a femtocell to be installed at the house, we could have done that at one-third the cost and made the customer happy,” he said.
Verizon as “AI native” company
A big way to better manage customers is the ability to micro-segment, and he spoke at length about how Verizon is using AI to its fullest extent.
He’s also making sure that Verizon applies AI everywhere. “I want us to be not an AI first company. I want us to be an AI native company,” he said.
Through an initiative called “every customer has a name,” they’re micro-segmenting down to every single customer, he said.
They’ve recruited “quite a number of AI savvy individuals” into the company over the last seven months or so, accomplishing more in the last three months than they had done in the previous three to four years, he said. The CEO expects to be substantially completed with this vast company-wide AI tech initiative by July and fully done by November.
In customer service, Verizon’s already seen a 1,280-basis point improvement in customer satisfaction scores year-over-year thanks to AI. In the network, 85% of problems are now being autonomously resolved, meaning these issues are taken care of before customers even see them, he said. They’ve also achieved more than $200 million in energy savings.
“We are working very closely with Google and Anthropic and other best of breed AI players to bring this to life,” he said. “I'm quite pleased with the amount of progress we've made in a short period of time.”
What analysts are saying
MoffettNathanson analyst Craig Moffett said all the AI improvements that Schulman laid out in the earnings call are noteworthy and genuinely impressive.
However, Verizon’s Q1 results are less impressive. “Better postpaid phone net adds is great… but not when it comes with a sizable loss of accounts. And sharply lower ARPU and ARPA run counter to the narrative of reduced promotionality and greater discipline,” he said in a report for investors.
“What we can’t quibble with is cost reduction. The old adage is that ‘you can’t cut your way to greatness.’ But if revenues are falling (organically), well… it’s great if you can cut. Verizon has.”
New Street Research analyst David Barden said in an investor note that the strong postpaid phone net adds show Schulman is here to fight tooth and nail. “Anyone that doubted whether Verizon might achieve their guidance for the year should have no doubts after this quarter,” he said. “The wireless industry has become more competitive and is expected to remain competitive.”
The big question is: Where are Verizon’s new customers coming from? “It didn’t come from AT&T,” which added 294,000 new postpaid phone customers in Q1. “Did it come from T-Mobile? Probably not,” Barden said, suggesting cable might be the source.
T-Mobile’s on deck to report Q1 2026 results tomorrow.