Verizon Communications Inc.

10/29/2025 | Press release | Distributed by Public on 10/29/2025 11:11

Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
Overview
Verizon Communications Inc. (the Company) is a holding company that, acting through its subsidiaries (together with the Company, collectively, Verizon), is one of the world's leading providers of communications, technology, information and streaming products and services to consumers, businesses and government entities. With a presence around the world, we offer data, video and voice services and solutions on our networks and platforms that are designed to meet customers' demand for mobility, reliable network connectivity and security.
To compete effectively in today's dynamic marketplace, we are focused on the capabilities of our high-performing networks to drive growth based on delivering what customers want and need in the digital world. We are consistently deploying new network architecture and technologies to secure our leadership in both fifth-generation (5G) and fourth-generation (4G) wireless networks. Our network quality is the hallmark of our brand and the foundation for the connectivity, platforms and solutions upon which we build our competitive advantage. In 2025, we are focused on enhancing our networks, offering innovative services and products, growing and maintaining a high-quality customer base and delivering strong financial and operating results.
Our strategy requires significant capital investments primarily to acquire wireless spectrum, put the spectrum into service, provide additional capacity for growth in our networks, invest in the fiber that supports our businesses, evolve and maintain our networks and develop and maintain significant advanced information technology systems and data system capabilities. We believe that our C-Band, millimeter wave and other key spectrum holdings, our 5G network, and our local and long-haul fiber infrastructure, will drive innovative products and services and fuel our growth.
Highlights of Our Financial Results for the Three Months Ended September 30, 2025 and 2024
(dollars in millions)
Highlights of Our Financial Results for the Nine Months Ended September 30, 2025 and 2024
(dollars in millions)
Business Overview
We have two reportable segments that we operate and manage as strategic business units - Verizon Consumer Group (Consumer) and Verizon Business Group (Business).
Revenue by Segment for the Three Months Ended September 30, 2025and 2024
Revenue by Segment for the Nine Months Ended September 30, 2025 and 2024
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Note: Excludes eliminations.
Verizon Consumer Group
Our Consumer segment provides consumer-focused wireless and wireline communications services and products. Our wireless services are provided across one of the most extensive wireless networks in the United States (U.S.) under the Verizon family of brands and through wholesale and other arrangements. We also provide fixed wireless access (FWA) broadband through our 5G or 4G LTE networks as an alternative to traditional landline internet access. Our wireline services are provided in nine states in the Mid-Atlantic and Northeastern U.S., as well as Washington D.C., over our 100% fiber-optic network through our Verizon Fios product portfolio and over a traditional copper-based network to customers who are not served by Fios.
Customers can obtain our wireless services on a postpaid or prepaid basis. Our postpaid service is generally billed one month in advance for a monthly access charge in return for access to and usage of network services. Our prepaid service is offered only to Consumer customers and enables individuals to obtain wireless services without credit verification by paying for all services in advance. The Consumer segment also offers several categories of wireless equipment to customers, including a variety of smartphones and other handsets, wireless-enabled internet devices, such as tablets, and other wireless-enabled connected devices, such as smart watches.
In addition to wireless services and equipment for retail customers, the Consumer segment sells residential fixed connectivity solutions, including internet, video and voice services, and wireless network access to resellers on a wholesale basis.
The Consumer segment's operating revenues for the three and nine months ended September 30, 2025 totaled $26.1 billion and $78.4 billion, respectively, representing an increase of 2.9% and 4.0%, respectively, compared to the similar periods in 2024. See "Segment Results of Operations" for additional information regarding our Consumer segment's operating performance and selected operating statistics.
Verizon Business Group
Our Business segment provides wireless and wireline communications services and products, including FWA broadband, data, video and advanced communication services, corporate networking solutions, security and managed network services, local and long distance voice services and network access to deliver various Internet of Things (IoT) services and products. We provide these products and services to businesses, public sector customers and wireless and wireline carriers across the U.S. and a subset of these products and services to customers around the world.
The Business segment's operating revenues for the three and nine months ended September 30, 2025 totaled $7.1 billion and $21.7 billion, respectively, representing a decrease of 2.8% and 1.5%, respectively, compared to the similar periods in 2024. See "Segment Results of Operations" for additional information regarding our Business segment's operating performance and selected operating statistics.
Corporate and Other
Corporate and other primarily includes device insurance programs, investments in unconsolidated businesses and development stage businesses that support our strategic initiatives, as well as unallocated corporate expenses, certain pension and other employee benefit related costs and interest and financing expenses. Corporate and other also includes the historical results of divested businesses and other adjustments and gains and losses that are not allocated or used in assessing segment performance due to their nature. Although such transactions are excluded from the business segment results, they are included in reported consolidated earnings. Gains and losses from these transactions that are not individually significant are included in
segment results and therefore are included in the chief operating decision maker's (CODM) assessment of segment performance. See "Consolidated Results of Operations" for additional information regarding Corporate and other results.
Capital Expenditures and Investments
We continue to invest in our wireless networks, high-speed fiber and other advanced technologies to position ourselves at the center of growth trends for the future. During the nine months ended September 30, 2025, these investments included $12.3 billion for capital expenditures. See "Cash Flows Used in Investing Activities" for additional information. Capital expenditures for 2025are expected to be within or below the range of $17.5 billion to $18.5 billion.
Global Networks and Technology
We consider the reliability, speed, capacity, coverage and security of our wireless network to be key factors in our continued success. Over the past several years, we have been leading the development of 5G wireless technology industry standards and the ecosystems for fixed and mobile 5G wireless services. Our evolution to 5G with its new architecture allows us to simplify operations by eliminating legacy network elements.
While we continue to improve our 5G wireless service coverage, we are also adding capacity and density to our networks. Network densification enables us to increase coverage, improve quality of service and add capacity to accommodate an increasing number of users.
In addition to enhancing our wireless service, our wireless mobility investments provide the foundation for our growing FWA broadband business. We are also continuing to expand our fiber-based networks, as customers increasingly value the ability to obtain wireless and wireline broadband services from the same provider. In September 2024, we entered into an agreement to acquire Frontier Communications Parent, Inc. (Frontier), a U.S. provider of broadband internet and other communication services, as part of our fiber expansion strategy, and we expect to increase the capital expenditures we devote to our fiber networks in 2025.
One Big Beautiful Bill Act
On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted. The OBBBA revises the U.S. federal corporate income tax by, among other things, making permanent 100% bonus depreciation on qualified fixed assets, making permanent the immediate deduction for domestic research and experimentation expenses, and permanently changing the limitation on the deduction of business interest expense to 30% of Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA). Verizon does not anticipate the provisions of the OBBBA will have a material impact on its effective income tax rate. We currently estimate that these provisions will both decrease our 2025 cash income tax liability and increase our deferred tax liability by $2.0 billion to $2.3 billion by December 31, 2025. We continue to analyze the effects of the OBBBA on our consolidated financial statements.
Tariffs and Other Government Initiatives
During the course of 2025, the U.S. government announced tariffs on goods imported from various countries to the U.S. Countries subject to such tariffs have imposed or may in the future impose reciprocal or retaliatory tariffs and other trade measures. We continue to actively monitor the tariff developments and analyze their potential impacts on our business, cost structure, supply chain and broader economic environment. We are also working closely with our strategic suppliers to manage the potential impacts.
In addition, the U.S. presidential administration is implementing significant changes to the size and scope of the federal government, including a reduction of the federal government workforce, changes in budgetary priorities and other cost efficiency measures. Several U.S. states have launched similar initiatives. We have seen negative impacts from these efforts in our business with public sector customers during the first three quarters of 2025. It is also possible that we could see impacts from the federal government shutdown and related federal workforce initiatives that commenced in October 2025.
While these developments have not had a material impact on our financial condition or results of operations to date, due to their evolving nature, we cannot predict with certainty the ultimate impacts they may have on our business and results in the future but those impacts could be material.
Consolidated Results of Operations
In this section, we discuss our overall results of operations and highlight special items, some of which are not included in our segment results. In "Segment Results of Operations" we review the performance of our two reportable segments in more detail.
Consolidated Operating Revenues
Three Months Ended Nine Months Ended
September 30, Increase/(Decrease) September 30, Increase/
(dollars in millions) 2025 2024 2025 2024 (Decrease)
Consumer $ 26,105 $ 25,360 $ 745 2.9 % $ 78,371 $ 75,344 $ 3,027 4.0 %
Business 7,142 7,351 (209) (2.8) 21,703 22,027 (324) (1.5)
Corporate and other 659 685 (26) (3.8) 1,982 1,929 53 2.7
Eliminations (85) (66) (19) 28.8 (246) (193) (53) 27.5
Consolidated Operating Revenues $ 33,821 $ 33,330 $ 491 1.5 $ 101,810 $ 99,107 $ 2,703 2.7
Consolidated operating revenues increased during both the three and nine months ended September 30, 2025compared to the similar periods in 2024 primarily due to revenue increases in our Consumer segment, partially offset by revenue decreases in our Business segment.
Revenues for our segments are discussed separately below under the heading "Segment Results of Operations."
Consolidated Operating Expenses
Three Months Ended Nine Months Ended
September 30, Increase/(Decrease) September 30, Increase/
(dollars in millions) 2025 2024 2025 2024 (Decrease)
Cost of services $ 6,863 $ 7,193 $ (330) (4.6) % $ 20,691 $ 21,064 $ (373) (1.8) %
Cost of wireless equipment 6,483 6,047 436 7.2 19,596 17,519 2,077 11.9
Selling, general and administrative expense 7,752 9,706 (1,954) (20.1) 23,438 25,873 (2,435) (9.4)
Depreciation and amortization expense 4,618 4,458 160 3.6 13,830 13,386 444 3.3
Consolidated Operating Expenses $ 25,716 $ 27,404 $ (1,688) (6.2) $ 77,555 $ 77,842 $ (287) (0.4)
Operating expenses for our segments are discussed separately below under the heading "Segment Results of Operations."
Cost of Services
Cost of services includes the following costs directly attributable to a service: salaries and wages, benefits, materials and supplies, content costs, contracted services, network access and transport costs, customer provisioning costs, computer systems support and costs to support our outsourcing contracts and technical facilities. Aggregate customer service costs, which include billing and service provisioning, are allocated between Cost of services and Selling, general and administrative expense.
Cost of servicesdecreased during both the three and nine months ended September 30, 2025 compared to the similar periods in 2024.
The decrease during the three months ended September 30, 2025 was primarily due to:
•a decrease of $189 million related to the asset and business rationalization charge taken in 2024; and
•a decrease of $107 million in access costs primarily as a result ofchanges in usage and net circuit access prices.
The decrease during the nine months ended September 30, 2025 was primarily as a result of:
•a decrease of $193 million in access costs primarily as a result of changes in usage and net circuit access prices;
•a decrease of $189 million related to the asset and business rationalization charge taken in 2024;
•a decrease of $122 million in other direct costs primarily related to legacy wireline products and services; and
•an increase of $154 million in regulatory fees mainly driven by a higher net Federal Universal Service Fund (FUSF) rate.
Cost of Wireless Equipment
Cost of wireless equipment increasedduring both the three and nine months ended September 30, 2025 compared to the similar periods in 2024.
The increase during the three months ended September 30, 2025 was primarily due to an increase of $426 million driven by a shift to higher priced equipment in the mix of wireless devices sold.
The increase during the nine months ended September 30, 2025 was primarily due to:
•an increase of $1.3 billiondriven by a higher volume of wireless devices sold primarily related to an increase of 13% in upgrades; and
•an increase of $793 million driven by a shift to higher priced equipment in the mix of wireless devices sold.
Selling, General and Administrative Expense
Selling, general and administrative expense includes salaries and wages and benefits not directly attributable to a service or product, the provision for credit losses, taxes other than income taxes, advertising and sales commission costs, call center and information technology costs, regulatory fees, professional service fees, rent and utilities for administrative space and device insurance program costs. Also included is a portion of the aggregate customer care costs as discussed above in "Cost of Services."
Selling, general and administrative expense decreased during both the three and nine months ended September 30, 2025 compared to the similar periods in 2024.
The decrease during the three months ended September 30, 2025 was primarily due to:
•a decrease of $1.7 billion due to severance charges in 2024 related to separations under our voluntary separation program as well as other headcount reduction initiatives; and
•a decrease of $185 million related to an asset and business rationalization charge taken in 2024.
The decrease during the nine months ended September 30, 2025 was primarily due to:
•a decrease of $1.9 billion primarily due to severance charges in 2024 related to separations under our voluntary separation program as well as other headcount reduction initiatives;
•a decrease of $256 million related to lower costs for device insurance programs primarily due to a decrease in claims;
•a decrease of $185 million related to an asset and business rationalization charge taken in 2024; and
•a decrease of $106 million related to a legacy legal matter from 2024 that did not reoccur.
See "Special Items" for additional information on the severance charges, the asset and business rationalization charges and the legacy legal matter.
Depreciation and Amortization Expense
Depreciation and amortization expense increased during both the three and nine months ended September 30, 2025 compared to the similar periods in 2024 primarily due to the change in the mix of net depreciable and amortizable assets, including the amortization period of certain acquisition-related intangible assets, and the continued deployment of C-Band and FWA network assets.
Other Consolidated Results
Other Income, Net
Three Months Ended Nine Months Ended
September 30, Increase/(Decrease) September 30, Increase/(Decrease)
(dollars in millions) 2025 2024 2025 2024
Interest income $ 68 $ 97 $ (29) (29.9) % $ 186 $ 258 $ (72) (27.9) %
Other components of net periodic benefit cost (63) (56) (7) 12.5 (295) (289) (6) 2.1
Net debt extinguishment gains
94 90 4 4.4 272 289 (17) (5.9)
Other, net (7) (59) 52 (88.1) 129 (60) 189 nm
Other Income, Net
$ 92 $ 72 $ 20 27.8 $ 292 $ 198 $ 94 47.5
nm - not meaningful
Other income, net, reflects certain items not directly related to our core operations, including interest income, debt extinguishment gains, components of net periodic pension and postretirement benefit cost and income and certain foreign exchange gains and losses.
Other income, net remained relatively flat for the three months ended September 30, 2025 and increased during the nine months ended September 30, 2025 compared to the similar periodsin 2024.
The increase during the nine months ended September 30, 2025 was primarily due to an increase resulting from fair market value adjustments on certain investments.
Interest Expense
Three Months Ended Nine Months Ended
September 30, Decrease September 30, Decrease
(dollars in millions) 2025 2024 2025 2024
Total interest costs on debt balances $ 1,846 $ 1,904 $ (58) (3.0) % $ 5,505 $ 5,754 $ (249) (4.3) %
Less capitalized interest costs 182 232 (50) (21.6) 570 749 (179) (23.9)
Interest Expense
$ 1,664 $ 1,672 $ (8) (0.5) $ 4,935 $ 5,005 $ (70) (1.4)
Average debt outstanding(1)(3)
$ 146,578 $ 148,952 $ 145,154 $ 151,149
Effective interest rate(2)(3)
5.0 % 5.1 % 5.1 % 5.1 %
(1)The average debt outstanding is a financial measure and is calculated by applying a simple average of prior months' end balances of total short-term and long-term debt, net of discounts, premiums and unamortized debt issuance costs.
(2)The effective interest rate is the rate of actual interest incurred on debt. It is calculated by dividing the annualized total interest costs on debt balances by the average debt outstanding.
(3)We believe that this measure is useful to management, investors and other users of our financial information in evaluating our debt financing cost and trends in our debt leverage management.
Total interest expense decreased during both the three and nine months ended September 30, 2025 compared to the similar periods in 2024 primarily as a result of a decrease in interest costs due to lower average debt balances partially offset by a decrease in capitalized interest due to additional C-Band spectrum licenses being placed into service.
Provision for Income Taxes
Three Months Ended Nine Months Ended
September 30, Increase September 30,
(dollars in millions) 2025 2024 2025 2024
Increase
Provision for income taxes $ 1,471 $ 891 $ 580 65.1 % $ 4,449 $ 3,576 $ 873 24.4 %
Effective income tax rate 22.5 % 20.7 % 22.7 % 21.8 %
The effective income tax rate is calculated by dividing the provision for income taxes by income before the provision for income taxes. The increase in the provision for income taxes during both the three and nine months ended September 30, 2025 compared to the similar periods in 2024 was primarily due to the increase in income before income taxes in the current period. The increase in the effective income tax rate during both the three and nine months ended September 30, 2025 compared to the similar periods in 2024 was primarily due to a reduction in deferred income taxes due to changes in state apportionment in the prior period.
Unrecognized Tax Benefits
Unrecognized tax benefits were $2.6 billion at both September 30, 2025 and December 31, 2024. Interest and penalties related to unrecognized tax benefits were $721 million (after-tax) and $684 million (after-tax) at September 30, 2025 and December 31, 2024, respectively.
Verizon Communications Inc. and/or its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various state, local and foreign jurisdictions. As a large taxpayer, we are under audit by the Internal Revenue Service and multiple state and foreign jurisdictions for various open tax years.
Consolidated Net Income, Consolidated EBITDA and Consolidated Adjusted EBITDA
Consolidated earnings before interest, taxes, depreciation and amortization (Consolidated EBITDA) and Consolidated Adjusted EBITDA, which are presented below, are non-GAAP financial measures that we believe are useful to management, investors and other users of our financial information in evaluating operating profitability on a more variable cost basis as they exclude the depreciation and amortization expense related primarily to capital expenditures and acquisitions that occurred in prior years, as well as in evaluating operating performance in relation to Verizon's competitors. Consolidated EBITDA is calculated by adding back interest, taxes, depreciation and amortization expense to net income.
Consolidated Adjusted EBITDA is calculated by excluding from Consolidated EBITDA the effect of the following non-operational items: equity in earnings and losses of unconsolidated businesses and other income and expense, net, as well as the effect of
certain special items. We believe that this measure is useful to management, investors and other users of our financial information in evaluating the effectiveness of our operations and underlying business trends. We believe that Consolidated Adjusted EBITDA is widely used by investors to compare a company's operating performance to its competitors by minimizing impacts caused by differences in capital structure, taxes, and depreciation and amortization policies. Further, the exclusion of non-operational items and special items enables comparability to prior period performance and trend analysis. See "Special Items" for additional information.
It is management's intent to provide non-GAAP financial information to enhance the understanding of Verizon's GAAP financial information, and it should be considered by the reader in addition to, but not instead of, the financial statements prepared in accordance with GAAP. Each non-GAAP financial measure is presented along with the corresponding GAAP measure so as not to imply that more emphasis should be placed on the non-GAAP measure. We believe that providing these non-GAAP measures in addition to the GAAP measures allows management, investors and other users of our financial information to more fully and accurately assess both consolidated and segment performance. The non-GAAP financial information presented may be determined or calculated differently by other companies and may not be directly comparable to that of other companies.
Three Months Ended Nine Months Ended
September 30, September 30,
(dollars in millions) 2025 2024 2025 2024
Consolidated Net Income $ 5,056 $ 3,411 $ 15,160 $ 12,835
Add:
Provision for income taxes 1,471 891 4,449 3,576
Interest expense
1,664 1,672 4,935 5,005
Depreciation and amortization expense(1)
4,618 4,458 13,830 13,386
Consolidated EBITDA $ 12,809 $ 10,432 $ 38,374 $ 34,802
Add (Less):
Other (income) expense, net(2)
$ (92) $ (72) $ (292) $ (198)
Equity in losses of unconsolidated businesses 6 24 3 47
Acquisition and integration related charges 52 - 52 -
Severance charges - 1,733 - 1,733
Asset and business rationalization
- 374 - 374
Legacy legal matter
- - - 106
Consolidated Adjusted EBITDA $ 12,775 $ 12,491 $ 38,137 $ 36,864
(1)Includes Amortization of acquisition-related intangible assets, which were $189 million and $571 million during the three and nine months ended September 30, 2025, respectively, and $186 million and $626 million during the three and nine months ended September 30, 2024, respectively. See "Special Items" for additional information.
(2) Includes Pension and benefits mark-to-market charges of $136 million during the nine months ended September 30, 2024. See "Special Items" for additional information.
The changes in Consolidated Net Income, Consolidated EBITDA and Consolidated Adjusted EBITDA in the table above during the three and nine months ended September 30, 2025 compared to the similar periods in 2024 were primarily a result of the factors described above in connection with consolidated operating revenues and consolidated operating expenses.
Segment Results of Operations
We have two reportable segments that we operate and manage as strategic business units - Consumer and Business. We measure and evaluate our segments based on segment operating income. The use of segment operating income is consistent with the CODM's assessment of segment performance.
To aid in the understanding of segment performance as it relates to segment operating income, management uses the following operating statistics to evaluate the overall effectiveness of our segments. We believe these operating statistics are useful to investors and other users of our financial information because they provide additional insight into drivers of our segments' operating results, key trends and performance relative to our peers. These operating statistics may be determined or calculated differently by other companies and may not be directly comparable to those statistics of other companies.
Wireless retail connections are retail customer device postpaid and prepaid connections as of the end of the period. Retail connections under an account may include those from smartphones and basic phones (collectively, phones), postpaid and prepaid FWA, as well as tablets and other internet devices, wearables and retail IoT devices. Wireless retail connections are calculated by adding total retail postpaid and prepaid new connections in the period to prior period retail connections, and subtracting total retail postpaid and prepaid disconnects in the period.
Wireless retail postpaid connectionsare retail postpaid customer device connections as of the end of the period. Retail postpaid connections under an account may include those from phones, postpaid FWA, as well as tablets and other internet devices,
wearables and retail IoT devices. Wireless retail postpaid connections are calculated by adding retail postpaid new connections in the period to prior period retail postpaid connections, and subtracting retail postpaid disconnects in the period.
Wireless retail prepaid connectionsare retail prepaid customer device connections as of the end of the period. Retail prepaid connections may include those from phones, prepaid FWA, as well as tablets and other internet devices, and wearables. Wireless retail prepaid connections are calculated by adding retail prepaid new connections in the period to prior period retail prepaid connections, and subtracting retail prepaid disconnects in the period.
Wireless retail core prepaid connectionsare wireless retail prepaid customer device connections, excluding our SafeLink brand, as of the end of the period. Retail core prepaid connections may include those from phones, prepaid FWA, as well as tablets and other internet devices, and wearables. Wireless retail core prepaid connections are calculated by adding retail core prepaid new connections in the period to prior period retail core prepaid connections, and subtracting retail core prepaid disconnects in the period.
Fios internet connectionsare the total number of connections to the internet using Fios internet services as of the end of the period. Fios internet connections are calculated by adding Fios internet new connections in the period to prior period Fios internet connections, and subtracting Fios internet disconnects in the period.
Fios video connections are the total number of connections to traditional linear video programming using Fios video services as of the end of the period. Fios video connections are calculated by adding Fios video net additions in the period to prior period Fios video connections. Fios video net additions are calculated by subtracting the Fios video disconnects from the Fios video new connections.
Total broadband connectionsare the total number of connections to the internet using Fios internet services, Digital Subscriber Line (DSL), and postpaid, prepaid and IoT FWA as of the end of the period. Total broadband connections are calculated by adding total broadband connections, net additions in the period to prior period total broadband connections.
FWA broadband connectionsare the total number of postpaid and prepaid connections to the internet through our 5G or 4G LTE wireless networks as of the end of the period. FWA broadband connections are calculated by adding FWA broadband connections, net additions in the period to prior period FWA broadband connections.
Wireline broadband connectionsare the total number of connections to the internet using DSL and Fios internet services as of the end of the period. Wireline broadband connections are calculated by adding wireline broadband connections, net additions in the period to prior period wireline broadband connections.
Wireless retail connections, net additions are the total number of additional retail customer device postpaid and prepaid connections, less the number of device disconnects in the period. Wireless retail connections, net additions in each period presented are calculated by subtracting the total retail postpaid and prepaid disconnects, net of certain adjustments, from the total retail postpaid and prepaid new connections in the period.
Wireless retail postpaid connections, net additions are the total number of additional retail customer device postpaid connections, less the number of device disconnects in the period. Wireless retail postpaid connections, net additions in each period presented are calculated by subtracting the retail postpaid disconnects, net of certain adjustments, from the retail postpaid new connections in the period.
Wireless retail prepaid connections, net additionsare the total number of additional retail customer device prepaid connections, less the number of device disconnects in the period. Wireless retail prepaid connections, net additions in each period presented are calculated by subtracting the retail prepaid disconnects, net of certain adjustments, from the retail prepaid new connections in the period.
Wireless retail core prepaid connections, net additionsare the total number of additional retail customer device core prepaid connections, less the number of device disconnects in the period. Wireless retail core prepaid connections, net additions in each period presented are calculated by subtracting the retail core prepaid disconnects, net of certain adjustments, from the retail core prepaid new connections in the period.
Wireless retail postpaid phone connections, net additions are the total number of additional retail customer postpaid phone connections, less the number of phone disconnects in the period. Wireless retail postpaid phone connections, net additions in each period presented are calculated by subtracting the retail postpaid phone disconnects, net of certain adjustments, from the retail postpaid phone new connections in the period.
Total broadband connections, net additionsare the total number of additional total broadband connections, less the number of total broadband disconnects in the period. Total broadband connections, net additions in each period presented are calculated by subtracting the total broadband disconnects, net of certain adjustments, from the total broadband new connections in the period.
FWA broadband connections, net additionsare the total number of additional FWA broadband connections, less the number of FWA broadband disconnects in the period. FWA broadband connections, net additions in each period presented are calculated
by subtracting the FWA broadband disconnects, net of certain adjustments, from the FWA broadband new connections in the period.
Wireline broadband connections, net additionsare the total number of additional wireline broadband connections, less the number of wireline broadband disconnects in the period. Wireline broadband connections, net additions in each period presented are calculated by subtracting the wireline broadband disconnects, net of certain adjustments, from the wireline broadband new connections in the period.
Wireless churnis the rate at which service to retail, retail postpaid, or retail postpaid phone connections is terminated on average in the period. The churn rate in each period presented is calculated by dividing retail disconnects, retail postpaid disconnects, or retail postpaid phone disconnects by the average retail connections, average retail postpaid connections, or average retail postpaid phone connections, respectively, in the period.
Wireless retail postpaid ARPAis the calculated average retail postpaid service revenue per account (ARPA) from retail postpaid accounts in the period. Wireless retail postpaid service revenue does not include recurring device payment plan billings related to the Verizon device payment program, insurance premiums or regulatory fees. Wireless retail postpaid ARPA in each period presented is calculated by dividing retail postpaid service revenue by the average retail postpaid accounts in the period.
Wireless retail postpaid accountsare wireless retail customers that are directly served and managed under the Verizon brand and use its services as of the end of the period. Accounts include unlimited plans, shared data plans and corporate accounts, as well as legacy single connection plans and multi-connection family plans. A single account may include monthly wireless services for a variety of connected devices. Wireless retail postpaid accounts are calculated by adding retail postpaid new accounts to the prior period retail postpaid accounts.
Wireless retail postpaid connections per account is the calculated average number of retail postpaid connections per retail postpaid account as of the end of the period. Wireless retail postpaid connections per account is calculated by dividing the total number of retail postpaid connections by the number of retail postpaid accounts as of the end of the period.
Segment operating income marginreflects the profitability of the segment as a percentage of revenue. Segment operating income margin is calculated by dividing total segment operating income by total segment operating revenues.
Segment earnings before interest, taxes, depreciation and amortization (Segment EBITDA), which is presented below, is a non-GAAP measure and does not purport to be an alternative to operating income (loss) as a measure of operating performance. We believe this measure is useful to management, investors and other users of our financial information in evaluating operating profitability on a more variable cost basis as it excludes the depreciation and amortization expense related primarily to capital expenditures and acquisitions that occurred in prior years, as well as in evaluating operating performance in relation to our competitors. Segment EBITDA is calculated by adding back depreciation and amortization expense to segment operating income (loss). Segment EBITDA margin is calculated by dividing Segment EBITDA by total segment operating revenues.
See Note 10 to the condensed consolidated financial statements for additional information.
Verizon Consumer Group
Our Consumer segment provides consumer-focused wireless and wireline communications services and products. Our wireless services are provided across one of the most extensive wireless networks in the U.S. under the Verizon family of brands and through wholesale and other arrangements. We also provide FWA broadband through our 5G or 4G LTE networks as an alternative to traditional landline internet access. Our wireline services are provided in nine states in the Mid-Atlantic and Northeastern U.S., as well as Washington D.C., over our 100% fiber-optic network through our Verizon Fios product portfolio and over a traditional copper-based network to customers who are not served by Fios.
Operating Revenues and Selected Operating Statistics
Three Months Ended Nine Months Ended
September 30, Increase/ September 30, Increase/
(dollars in millions, except ARPA) 2025 2024 (Decrease) 2025 2024 (Decrease)
Service(1)
$ 20,338 $ 19,919 $ 419 2.1 % $ 60,664 $ 59,394 $ 1,270 2.1 %
Wireless equipment 4,766 4,478 288 6.4 14,667 13,111 1,556 11.9
Other(1)
1,001 963 38 3.9 3,040 2,839 201 7.1
Total Operating Revenues $ 26,105 $ 25,360 $ 745 2.9 $ 78,371 $ 75,344 $ 3,027 4.0
Revenue Statistics:
Wireless service revenue(1)
$ 17,441 $ 17,036 $ 405 2.4 $ 52,009 $ 50,781 $ 1,228 2.4
Fios revenue $ 2,937 $ 2,916 $ 21 0.7 $ 8,757 $ 8,708 $ 49 0.6
Connections ('000):(2)
Wireless retail
115,076 114,211 865 0.8
Wireless retail postpaid
94,870 94,005 865 0.9
Wireless retail core prepaid(3)
19,062 18,780 282 1.5
Fios internet 7,263 7,088 175 2.5
Fios video 2,494 2,744 (250) (9.1)
FWA broadband 3,198 2,498 700 28.0
Wireline broadband 7,395 7,264 131 1.8
Total broadband 10,593 9,762 831 8.5
Net Additions in Period ('000):
Total wireless retail (108) (1) (107) nm (155) (694) 539 77.7
Wireless retail postpaid (74) 68 (142) nm (237) 215 (452) nm
Wireless retail postpaid phone (7) 18 (25) nm (414) (285) (129) (45.3)
Wireless retail core prepaid(3)
47 80 (33) (41.3) 234 (63) 297 nm
FWA broadband 121 209 (88) (42.1) 484 630 (146) (23.2)
Wireline broadband 47 26 21 80.8 95 75 20 26.7
Total broadband 168 235 (67) (28.5) 579 705 (126) (17.9)
Churn Rate:
Wireless retail 1.61 % 1.61 % 1.59 % 1.62 %
Wireless retail postpaid 1.12 % 1.07 % 1.12 % 1.04 %
Wireless retail postpaid phone 0.91 % 0.83 % 0.90 % 0.82 %
Account Statistics:
Wireless retail postpaid ARPA(1)
$ 147.91 $ 144.94 $ 2.97 2.0 $ 147.29 $ 143.46 $ 3.83 2.7
Wireless retail postpaid accounts ('000)(2)
32,353 32,719 (366) (1.1)
Wireless retail postpaid connections per account(2)
2.93 2.87 0.06 2.1
(1)Reflects the reclassification of recurring device protection and insurance related plan revenues from Other revenue into Wireless service revenue in the first quarter of 2025.
(2)As of end of period.
(3)Represents total prepaid results excluding our SafeLink brand.
Where applicable, the operating results reflect certain adjustments, including those related to the reclassification of connections associated with Verizon's second number offering, migration activity among different types of devices and plans, customer profile changes, and adjustments in connection with mergers, acquisitions and divestitures. Where applicable, historical results have been recast to conform to the current period presentation.
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Consumer's total operating revenues increased during both the three and nine months ended September 30, 2025 compared to the similar periods in 2024 as a result of increases in Service, Wireless equipment and Other revenues.
Service Revenue
Service revenue increased during both the three and nine months ended September 30, 2025 compared to the similar periods in 2024 primarily driven by an increase in Wireless service revenue.
Wireless service revenue increased during the three months ended September 30, 2025 compared to the similar period in 2024 primarily due to:
•an increase of $202 million related to growth in non-retail service revenue; and
•an increase of $160 million in postpaid revenue primarily related to higher adoption of perks and premium MyPlan offerings, pricing actions, and a 28% increase in our FWA subscriber base. These increases were partially offset by the amortization of wireless equipment sales promotions.
Wireless service revenue increased during the nine months ended September 30, 2025 compared to the similar period in 2024 primarily as a result of:
•an increase of $787 million in postpaid revenue primarily related to pricing actions, higher adoption of perks and premium MyPlan offerings, and a 28% increase in our FWA subscriber base. These increases were partially offset by the amortization of wireless equipment sales promotions; and
•an increase of $521 million related to growth in non-retail service revenue.
Wireless Equipment Revenue
Wireless equipment revenue increased during both the three and nine months ended September 30, 2025 compared to the similar periods in 2024.
The increase during the three months ended September 30, 2025 was primarily due to an increase of $370 million related to a shift to higher priced equipment in the mix of wireless devices sold.
The increase during the nine months ended September 30, 2025 was primarily due to:
•an increase of $1.0 billion driven by a higher volume of wireless devices sold primarily related to an increase of 18% in upgrades, partially offset by the impact of related promotions; and
•an increase of $574 million related to a shift to higher priced equipment in the mix of wireless devices sold.
Other Revenue
Other revenue includes fees that partially recover the direct and indirect costs of complying with regulatory and industry obligations and programs, leasing and interest recognized when equipment is sold to the customer by an authorized agent under a device payment plan agreement.
Other revenue increased during both the three and nine months ended September 30, 2025 compared to the similar periods in 2024 primarily due to an increase of $38 million and $201 million, respectively, driven by regulatory surcharges primarily related to a higher net FUSFrate.
Operating Expenses
Three Months Ended Nine Months Ended
September 30, Increase September 30, Increase
(dollars in millions) 2025 2024 2025 2024
Cost of services $ 4,635 $ 4,567 $ 68 1.5 % $ 13,790 $ 13,554 $ 236 1.7 %
Cost of wireless equipment 5,270 4,850 420 8.7 15,988 14,032 1,956 13.9
Selling, general and administrative expense 4,968 4,928 40 0.8 15,169 15,064 105 0.7
Depreciation and amortization expense 3,568 3,411 157 4.6 10,693 10,114 579 5.7
Total Operating Expenses $ 18,441 $ 17,756 $ 685 3.9 $ 55,640 $ 52,764 $ 2,876 5.5
Cost of Services
Cost of services increased during both the three and nine months ended September 30, 2025 compared to the similar periods in 2024.
The increase during the three months ended September 30, 2025 was primarily due to an increase of $55 million in rent and lease expense primarily driven by new leases and lease modifications related to the continued deployment of the C-Band spectrum and Consumer's proportionate usage of shared leased assets.
The increase during the nine months ended September 30, 2025 was primarily due to:
•an increase of $138 million in rent and lease expense primarily driven by new leases and lease modifications related to the continued deployment of the C-Band spectrum and Consumer's proportionate usage of shared leased assets; and
•an increase of $121 million in regulatory fees driven by a higher net FUSF rate.
Cost of Wireless Equipment
Cost of wireless equipment increased during both the three and nine months ended September 30, 2025 compared to the similar periods in 2024.
The increase during the three months ended September 30, 2025 was primarily due to an increase of $403 million due to a shift to higher priced equipment in the mix of wireless devices sold.
The increase during the nine months ended September 30, 2025 was primarily due to:
•an increase of $1.3 billion driven by a higher volume of wireless devices sold primarily related to an increase of 18% in upgrades; and
•an increase of $687 million due to a shift to higher priced equipment in the mix of wireless devices sold.
Selling, General and Administrative Expense
Selling, general and administrative expense remained relatively flat for the three months ended September 30, 2025 and increased during the nine months ended September 30, 2025 compared to the similar periods in 2024.
The increase during the nine months ended September 30, 2025 was primarily due to:
•an increase of $48 million in advertising costs related to various marketing campaigns in 2025; and
•an increase of $41 million in building and facility costs primarily due to higher utility rates.
Depreciation and Amortization Expense
Depreciation and amortization expense increased during both the three and nine months ended September 30, 2025 compared to the similar periods in 2024 driven by the change in the mix of total Verizon depreciable and amortizable assets and Consumer's usage of those assets.
Segment Operating Income and EBITDA
Three Months Ended Nine Months Ended
September 30, Increase September 30, Increase
(dollars in millions) 2025 2024 2025 2024
Segment Operating Income $ 7,664 $ 7,604 $ 60 0.8 % $ 22,731 $ 22,580 $ 151 0.7 %
Add Depreciation and amortization expense 3,568 3,411 157 4.6 10,693 10,114 579 5.7
Segment EBITDA $ 11,232 $ 11,015 $ 217 2.0 $ 33,424 $ 32,694 $ 730 2.2
Segment operating income margin 29.4 % 30.0 % 29.0 % 30.0 %
Segment EBITDA margin 43.0 % 43.4 % 42.6 % 43.4 %
The changes in the table above during the three and nine months ended September 30, 2025 compared to the similar periods in 2024 were primarily a result of the factors described in connection with Consumer operating revenues and operating expenses.
Verizon Business Group
Our Business segment provides wireless and wireline communications services and products, including FWA broadband, data, video and advanced communication services, corporate networking solutions, security and managed network services, local and long distance voice services and network access to deliver various IoT services and products. We provide these products and services to businesses, public sector customers and wireless and wireline carriers across the U.S. and a subset of these products and services to customers around the world. The Business segment is organized in three customer groups: Enterprise and Public Sector, Business Markets and Other, and Wholesale.
Operating Revenues and Selected Operating Statistics
Three Months Ended Nine Months Ended
September 30, Increase/ September 30, Increase/
(dollars in millions) 2025 2024 (Decrease) 2025 2024 (Decrease)
Enterprise and Public Sector $ 3,311 $ 3,538 $ (227) (6.4) % $ 10,203 $ 10,670 $ (467) (4.4) %
Business Markets and Other
3,352 3,263 89 2.7 10,012 9,661 351 3.6
Wholesale 479 550 (71) (12.9) 1,488 1,696 (208) (12.3)
Total Operating Revenues(1)
$ 7,142 $ 7,351 $ (209) (2.8) $ 21,703 $ 22,027 $ (324) (1.5)
Revenue Statistics:
Wireless service revenue(2)
$ 3,588 $ 3,562 $ 26 0.7 $ 10,732 $ 10,550 $ 182 1.7
Fios revenue $ 310 $ 314 $ (4) (1.3) $ 930 $ 938 $ (8) (0.9)
Connections ('000):(3)
Wireless retail postpaid 31,043 30,532 511 1.7
Fios internet 411 397 14 3.5
Fios video 49 56 (7) (12.5)
FWA broadband 2,193 1,698 495 29.2
Wireline broadband 456 459 (3) (0.7)
Total broadband 2,649 2,157 492 22.8
Net Additions in Period ('000):
Wireless retail postpaid 110 281 (171) (60.9) 269 727 (458) (63.0)
Wireless retail postpaid phone
51 149 (98) (65.8) 160 364 (204) (56.0)
FWA broadband 140 154 (14) (9.1) 363 465 (102) (21.9)
Wireline broadband (2) - (2) nm (4) (1) (3) nm
Total broadband 138 154 (16) (10.4) 359 464 (105) (22.6)
Churn Rate:
Wireless retail postpaid 1.56 % 1.45 % 1.56 % 1.47 %
Wireless retail postpaid phone
1.25 % 1.12 % 1.22 % 1.11 %
(1)Service and other revenues included in our Business segment were approximately $6.3 billion and $6.5 billion for the three months ended September 30, 2025 and 2024, respectively, and $19.1 billion and $19.4 billion for the nine months ended September 30, 2025 and 2024, respectively. Wireless equipment revenues included in our Business segment were $853 million and $865 million for the three months ended September 30, 2025 and 2024, respectively, and $2.6 billion for both the nine months ended September 30, 2025 and 2024.
(2) Reflects the reclassification of recurring device protection and insurance related plan revenues from Other revenue into Wireless service revenue in the first quarter of 2025.
(3) As of end of period.
Where applicable, the operating results reflect certain adjustments, including those related to the reclassification of connections associated with Verizon's second number offering, migration activity among different types of devices and plans, customer profile changes, and adjustments in connection with mergers, acquisitions and divestitures. Where applicable, historical results have been recast to conform to the current period presentation.
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Business's total operating revenues decreased during both the three and nine months ended September 30, 2025 compared to the similar periods in 2024 as a result of decreases in Enterprise and Public Sector and Wholesale revenues, partially offset by an increase in Business Markets and Other revenue.
Enterprise and Public Sector
Enterprise and Public Sector offers wireless products and services as well as wireline connectivity such as broadband and managed solutions to our large business and private sector customers. Large businesses are identified based on their size and volume of business with Verizon. Public sector customers include U.S. federal, state and local governments and educational institutions. Our offerings to this customer group include plans with features and pricing designed to address their specific needs.
Enterprise and Public Sector revenues decreased during both the three and nine months ended September 30, 2025 compared to the similar periods in 2024 primarily due to:
•a decrease of $165 million and $379 million, respectively, in wireline revenue primarily driven by declines in networking, traditional data and voice communication services along with related professional services, due to secular market pressure and technology shifts, coupled with lower customer premise equipment sales volumes; and
•a decrease of $61 million and $124 million, respectively, in Wireless service revenue primarily driven by pressure in Public Sector in part from government efficiency efforts.
Business Markets and Other
Business Markets and Other offers wireless services (including FWA broadband), wireless equipment, advanced communication services, tailored voice and networking products, Fios services, advanced voice solutions and security services to businesses that ordinarily do not meet the requirements to be categorized as Enterprise and Public Sector, as described above. Business Markets and Other also includes solutions that support mobile resource management.
Business Markets and Other revenues increased during both the three and nine months ended September 30, 2025 compared to the similar periods in 2024 primarily due to an increase of $87 million and $306 million, respectively, in Wireless service revenue driven by pricing actions and an increase in our FWA subscriber base partially offset by the amortization of wireless equipment sales promotions.
Wholesale
Wholesale offers wireline communications services including data, voice, local dial tone and broadband services primarily to local, long distance, and wireless carriers that use our facilities to provide services to their customers.
Wholesale revenues decreased during both the three and nine months ended September 30, 2025 compared to the similar periods in 2024 primarily due to a decrease of $71 million and $208 million, respectively, related to declines in traditional data and voice communication services and network connectivity as a result of technology substitution.
Operating Expenses
Three Months Ended Nine Months Ended
September 30, Increase/(Decrease) September 30, Increase/(Decrease)
(dollars in millions) 2025 2024 2025 2024
Cost of services $ 2,224 $ 2,440 $ (216) (8.9) % $ 6,897 $ 7,327 $ (430) (5.9) %
Cost of wireless equipment 1,213 1,197 16 1.3 3,608 3,487 121 3.5
Selling, general and administrative expense 2,033 2,109 (76) (3.6) 6,173 6,503 (330) (5.1)
Depreciation and amortization expense 1,035 1,040 (5) (0.5) 3,086 3,246 (160) (4.9)
Total Operating Expenses $ 6,505 $ 6,786 $ (281) (4.1) $ 19,764 $ 20,563 $ (799) (3.9)
Cost of Services
Cost of services decreased during both the three and nine months ended September 30, 2025 compared to the similar periods in 2024.
The decrease during the three months ended September 30, 2025 was primarily due to:
•a decrease of $92 million in access costs primarily related to changes in circuit usage and pricing;
•a decrease of $47 million in personnel costs related to the impact of workforce changes;
•a decrease of $32 million in other direct costs primarily related to legacy wireline products and services; and
•a decrease of $31 million in customer premise equipment costs due to lower volumes sold.
The decrease during the nine months ended September 30, 2025 was primarily due to:
•a decrease of $149 million in access costs primarily related to changes in circuit usage and pricing;
•a decrease of $113 million in personnel costs related to the impact of workforce changes;
•a decrease of $86 million in other direct costs primarily related to legacy wireline products and services; and
•a decrease of $79 million in customer premise equipment costs due to lower volumes sold.
Cost of Wireless Equipment
Cost of wireless equipment remained relatively flat during the three months ended September 30, 2025 and increased during the nine months ended September 30, 2025 compared to the similar periods in 2024.
The increase during the nine months ended September 30, 2025 was primarily due to:
•an increase of $74 million related to a shift to higher priced equipment in the mix of wireless devices sold; and
•an increase of $47 million driven by a higher volume of wireless devices sold.
Selling, General and Administrative Expense
Selling, general and administrative expense decreased for both the three and nine months ended September 30, 2025 compared to the similar periods in 2024.
The decrease during the three months ended September 30, 2025 was primarily due to:
•a decrease of $48 million due to personnel costs related to the impact of workforce changes primarily due to the voluntary separation program that was announced in June of 2024 and completed in March of 2025; and
•a decrease of $18 million in advertising costs.
The decrease during the nine months ended September 30, 2025 was primarily due to:
•a decrease of $231 million in personnel costs related to the impact of workforce changes primarily due to the voluntary separation program that was announced in June of 2024 and completed in March of 2025; and
•a decrease of $34 million in advertising costs.
Depreciation and Amortization Expense
Depreciation and amortization expense decreased during both the three and nine months ended September 30, 2025 compared to the similar periods in 2024 driven by the change in the mix of total Verizon depreciable and amortizable assets and Business's usage of those assets.
Segment Operating Income and EBITDA
Three Months Ended Nine Months Ended
September 30, Increase/(Decrease) September 30, Increase/(Decrease)
(dollars in millions) 2025 2024 2025 2024
Segment Operating Income $ 637 $ 565 $ 72 12.7 % $ 1,939 $ 1,464 $ 475 32.4 %
Add Depreciation and amortization expense 1,035 1,040 (5) (0.5) 3,086 3,246 (160) (4.9)
Segment EBITDA $ 1,672 $ 1,605 $ 67 4.2 $ 5,025 $ 4,710 $ 315 6.7
Segment operating income margin 8.9 % 7.7 % 8.9 % 6.6 %
Segment EBITDA margin 23.4 % 21.8 % 23.2 % 21.4 %
The changes in the table above during both the three and nine months ended September 30, 2025 compared to the similar periods in 2024 were primarily a result of the factors described in connection with Business operating revenues and operating expenses.
Special Items
Special items included in Income Before Provision For Income Taxes were as follows:
Three Months Ended Nine Months Ended
September 30, September 30,
(dollars in millions) 2025 2024 2025 2024
Amortization of acquisition-related intangible assets(1)
Depreciation and amortization expense $ 189 $ 186 $ 571 $ 626
Acquisition and integration related charges
Selling, general and administrative expense
52 - 52 -
Severance, pension and benefits charges
Selling, general and administrative expense - 1,733 - 1,733
Other (income) expense, net - - - 136
Asset and business rationalization
Cost of Services
- 189 - 189
Selling, general and administrative expense
- 185 - 185
Legacy legal matter
Selling, general and administrative expense
- - - 106
Total $ 241 $ 2,293 $ 623 $ 2,975
(1) Amounts are included in segment results of operations.
Consolidated Adjusted EBITDA, a non-GAAP measure discussed in the section titled "Consolidated Net Income, Consolidated EBITDA and Consolidated Adjusted EBITDA" as part of Consolidated Results of Operations, excludes all of the amounts included above.
The income and expenses related to special items included in our condensed consolidated results of operations were as follows:
Three Months Ended Nine Months Ended
September 30, September 30,
(dollars in millions) 2025 2024 2025 2024
Within Total Operating Expenses $ 241 $ 2,293 $ 623 $ 2,839
Within Other (income) expense, net - - - 136
Total $ 241 $ 2,293 $ 623 $ 2,975
Amortization of Acquisition-Related Intangible Assets
During the three and nine months ended September 30, 2025, we recorded pre-tax amortization expense of $189 million and $571 million, respectively, related to acquired intangible assets.
During the three and nine months ended September 30, 2024, we recorded pre-tax amortization expense of $186 million and $626 million, respectively, related to acquired intangible assets.
Acquisition and Integration Related Charges
During both the three and nine months ended September 30, 2025, we recorded charges of $52 million related to transaction and integration expenses associated with the pending acquisition of Frontier.
Severance, Pension and Benefits Charges
During both the three and nine months ended September 30, 2024, we recorded pre-tax severance charges of $1.7 billion related to separations under our voluntary separation program for select U.S.-based management employees as well as other headcount reduction initiatives.
During the nine months ended September 30, 2024, we recorded a net pre-tax remeasurement loss of $136 million in our pension plans triggered by settlements. The remeasurement loss was primarily driven by a $245 million charge resulting from the difference between our estimated and actual return on assets, partially offset by a credit of $109 million due to changes in our discount rate assumption used to determine the current year liabilities of our pension plans.
See Note 8 to the condensed consolidated financial statements for additional information.
Asset and Business Rationalization
During both the three and nine months ended September 30, 2024, we recorded a pre-tax asset and business rationalization charge of $374 million predominately related to the decision to cease use of certain real estate assets and exit non-strategic portions of certain businesses as part of our continued transformation initiatives.
Legacy Legal Matter
During the nine months ended September 30, 2024, we recorded a pre-tax charge of $106 million associated with a litigation matter related to a legacy contract for the production of telephone directories in Costa Rica by a subsidiary of the Company.
Consolidated Financial Condition
Nine Months Ended
September 30,
(dollars in millions) 2025 2024 Change
Cash Flows Provided By (Used In)
Operating activities
$ 28,023 $ 26,480 $ 1,543
Investing activities
(11,680) (13,113) 1,433
Financing activities
(12,822) (11,477) (1,345)
Increase in cash, cash equivalents and restricted cash $ 3,521 $ 1,890 $ 1,631
We use the net cash generated from our operations to invest in new businesses and spectrum, fund expansion and modernization of our networks, pay dividends, service and repay external financing and, when appropriate, buy back shares of our outstanding common stock. Our sources of funds, primarily from operations and, to the extent necessary, from external financing arrangements, are sufficient to meet ongoing operating and investing requirements over the next 12 months and beyond.
Our cash and cash equivalents are held both domestically and internationally, and are invested to maintain principal and provide liquidity. See "Market Risk" for additional information regarding our foreign currency risk management strategies.
We expect that our capital spending requirements will continue to be financed primarily through internally generated funds. Debt or equity financing may be needed to fund additional investments or development activities, including, for example, to complete our acquisition of Frontier, or to maintain an appropriate capital structure to ensure our financial flexibility. Our external financing arrangements include credit facilities and other bank lines of credit, an active commercial paper program, vendor financing arrangements, issuances of registered debt or equity securities, U.S. retail medium-term notes and other securities that are privately-placed or offered overseas. In addition, we monetize certain receivables through asset-backed debt transactions.
Cash Flows Provided By Operating Activities
Our primary source of funds continues to be cash generated from operations. Net cash provided by operating activities increased $1.5 billion during the nine months ended September 30, 2025 compared to the similar period in 2024 primarily due to an increase in earnings and discretionary pension plan contributions of $365 million made during the nine months ended September 30, 2024 that did not reoccur. As a result of the prior year discretionary contributions to our qualified pension plans and the additional non-cash contribution made in April 2025 in the principal amount of $563 million, we expect that there will be no required pension funding through the end of 2025, subject to changes in market conditions.
Cash Flows Used In Investing Activities
Capital Expenditures
Capital expenditures continue to relate primarily to the use of capital resources to enhance the operating efficiency and productivity of our networks, maintain our existing infrastructure, facilitate the introduction of new products and services and enhance responsiveness to competitive challenges.
Capital expenditures, including capitalized software, for the nine months ended September 30, 2025 and 2024 were $12.3 billion and $12.0 billion, respectively. Capital expenditures increased $244 million during the nine months ended September 30, 2025 compared to the similar period in 2024 primarily due to Fios footprint expansion and incremental investments to deploy C-Band spectrum.
Acquisitions of Wireless Licenses
During the nine months ended September 30, 2025 and 2024, we recorded capitalized interest related to wireless licenses of $338 million and $485 million, respectively.
During the nine months ended September 30, 2024, we made payments of $269 million for obligations related to clearing costs and accelerated clearing incentives associated with Auction 107.
Cash Flows Used In Financing Activities
We seek to maintain a mix of fixed and variable rate debt to lower borrowing costs within reasonable risk parameters and to protect against earnings and cash flow volatility resulting from changes in market conditions. During the nine months ended September 30, 2025, net cash used in financing activities was $12.8 billion. During the nine months ended September 30, 2024, net cash used in financing activities was $11.5 billion.
During the nine months ended September 30, 2025, our net cash used in financing activities was primarily driven by cash dividends paid of $8.6 billion, repayments of asset-backed long-term borrowings of $6.4 billion and repayments and repurchases of long-term borrowings and finance lease obligations of $7.5 billion. These payments were partially offset by proceeds from asset-backed long-term borrowings of $7.3 billion and proceeds from long-term borrowings of $4.0 billion.
At September 30, 2025, our total debt of $146.8 billion included unsecured debt of $119.7 billion and secured debt of $27.1 billion. At December 31, 2024, our total debt of $144.0 billion included unsecured debt of $117.9 billion and secured debt of $26.1 billion. During the nine months ended September 30, 2025 and 2024, our effective interest rate was 5.1%. See Note 5 to the condensed consolidated financial statements for additional information regarding our debt activity, which excludes the impact from mark-to-market adjustments on foreign currency denominated debt.
Verizon may acquire debt securities issued by Verizon and its affiliates through open market purchases, redemptions, privately negotiated transactions, tender offers, exchange offers, or otherwise, upon such terms and at such prices as Verizon may from time to time determine, for cash or other consideration.
Asset-Backed Debt
Cash collections on the receivables and on the underlying receivables related to the participation interest collateralizing our asset-backed notes issued to third-party investors and loans received from banks and their conduit facilities are required at certain specified times to be placed into segregated accounts. Deposits to the segregated accounts are considered restricted cash and are included in Prepaid expenses and other and Other assets in our condensed consolidated balance sheets.
Proceeds from our asset-backed debt transactions are reflected in Cash flows from financing activities in our condensed consolidated statements of cash flows. The asset-backed debt issued is included in Debt maturing within one year and Long-term debt in our condensed consolidated balance sheets.
See Note 5 to the condensed consolidated financial statements for additional information.
Long-Term Credit Facilities
At September 30, 2025
(dollars in millions) Maturities Facility Capacity Unused Capacity Principal Amount Outstanding
Verizon revolving credit facility(1)
2028 $ 12,000 $ 11,977 $ -
Various export credit facilities(2)
2025 - 2031 10,000 - 4,588
Total $ 22,000 $ 11,977 $ 4,588
(1) The revolving credit facility does not require us to comply with financial covenants or maintain specified credit ratings, and it permits us to borrow even if our business has incurred a material adverse change. The revolving credit facility provides for the issuance of letters of credit. As of September 30, 2025, there have been no drawings against the revolving credit facility since its inception.
(2) During the ninemonths ended September 30, 2025 and 2024,there were no drawings from these facilities. Borrowings under certain of these facilities are repaid semi-annually in equal installments up to the applicable maturity dates. Maturities reflect maturity dates of principal amounts outstanding. Any amounts borrowed under these facilities and subsequently repaid cannot be reborrowed.
Other, Net
Other, net cash flow from financing activities during the nine months ended September 30, 2025 includes $563 million in payments related to vendor financing arrangements, $366 million in equity distribution payments made for controlled entities, $359 million in payments made under the sublease arrangement for our cell towers, and $163 million in payments related to tax withholding of employee share based arrangements.
Dividends
As in prior periods, dividend payments were a significant use of capital resources. We paid $8.6 billion and $8.4 billion in cash dividends during the nine months ended September 30, 2025 and 2024, respectively.
Covenants
Our credit agreements contain covenants that are typical for large, investment grade companies. These covenants include requirements to pay interest and principal in a timely fashion, pay taxes, maintain insurance with responsible and reputable insurance companies, preserve our corporate existence, keep appropriate books and records of financial transactions, maintain our properties, provide financial and other reports to our lenders, limit pledging and disposition of assets and mergers and consolidations, and other similar covenants.
We and our consolidated subsidiaries are in compliance with all of our restrictive covenants in our debt agreements.
Change In Cash, Cash Equivalents and Restricted Cash
Our Cash and cash equivalents at September 30, 2025 totaled $7.7 billion, a $3.5 billion increase compared to December 31, 2024, primarily as a result of the factors discussed above.
Restricted cash totaled $450 million and $441 million as of September 30, 2025 and December 31, 2024, respectively, primarily related to cash collections on certain receivables and on the underlying receivables related to the participation interest that are required at certain specified times to be placed into segregated accounts.
Free Cash Flow
Free cash flow is a non-GAAP financial measure that reflects an additional way of viewing our liquidity that, we believe, when viewed with our GAAP results, provides management, investors and other users of our financial information with a more complete understanding of factors and trends affecting our cash flows. Free cash flow is calculated by subtracting capital expenditures (including capitalized software) from net cash provided by operating activities. We believe it is a more conservative measure of cash flow since capital expenditures are necessary for ongoing operations. Free cash flow has limitations due to the fact that it does not represent the residual cash flow available for discretionary expenditures. For example, free cash flow does not incorporate payments made on finance lease obligations or cash payments for business acquisitions or wireless licenses. Therefore, we believe it is important to view free cash flow as a complement to our entire condensed consolidated statements of cash flows.
The following table reconciles net cash provided by operating activities to free cash flow:
Nine Months Ended
September 30,
(dollars in millions) 2025 2024 Change
Net cash provided by operating activities $ 28,023 $ 26,480 $ 1,543
Less Capital expenditures (including capitalized software) 12,263 12,019 244
Free cash flow $ 15,760 $ 14,461 $ 1,299
The increase in free cash flow during the nine months ended September 30, 2025 compared to the similar period in 2024 is a reflection of the increase in operating cash flows, partially offset by the increase in capital expenditures, both of which are discussed above.
Other Future Obligations
As of September 30, 2025, Verizon had 28 renewable energy purchase agreements with third parties for a total of approximately 3.7 gigawatts of anticipated renewable energy capacity across multiple states. See Note 12 to the condensed consolidated financial statements for additional information.
Market Risk
We are exposed to various types of market risk in the normal course of business, including the impact of interest rate changes, foreign currency exchange rate fluctuations, changes in investment, equity and commodity prices and changes in corporate tax rates. We employ risk management strategies, which may include the use of a variety of derivatives including cross currency swaps, forward starting interest rate swaps, interest rate swaps, interest rate caps, treasury rate locks and foreign exchange forwards. We do not hold derivatives for trading purposes.
It is our general policy to enter into interest rate, foreign currency and other derivative transactions only to the extent necessary to achieve our desired objectives in optimizing exposure to various market risks. Our objectives include maintaining a mix of fixed and variable rate debt to lower borrowing costs within reasonable risk parameters and to protect against earnings and cash flow volatility resulting from changes in market conditions. We do not hedge our market risk exposure in a manner that would completely eliminate the effect of changes in interest rates and foreign exchange rates on our earnings.
Counterparties to our derivative contracts are major financial institutions with whom we have negotiated derivatives agreements (ISDA master agreements) and credit support annex (CSA) agreements which provide rules for collateral exchange. The CSA agreements contain fixed cap amounts or rating based thresholds such that we or our counterparties may be required to hold or
post collateral based upon changes in outstanding positions as compared to established thresholds or caps and changes in credit ratings. We do not offset fair value amounts recognized for derivative instruments and fair value amounts recognized for the right to reclaim cash collateral or the obligation to return cash collateral arising from derivative instruments recognized at fair value. At September 30, 2025, we did not hold any collateral. At September 30, 2025,we posted $1.1 billion of collateral related to derivative contracts under collateral exchange agreements, which was recorded as Prepaid expenses and other in our condensed consolidated balance sheet. At December 31, 2024, we did not hold any collateral. At December 31, 2024, we posted $2.1 billion of collateral related to derivative contracts under collateral exchange agreements, which was recorded as Prepaid expenses and other in our condensed consolidated balance sheet. While we may be exposed to credit losses due to the nonperformance of our counterparties, we consider the risk remote and do not expect that any such nonperformance would result in a significant effect on our results of operations or financial condition due to our diversified pool of counterparties. See Note 7 to the condensed consolidated financial statements for additional information regarding the derivative portfolio.
Interest Rate Risk
We are exposed to changes in interest rates, primarily on our short-term debt and the portion of long-term debt that carries floating interest rates. As of September 30, 2025, approximately 78% of the aggregate principal amount of our total debt portfolio consisted of fixed-rate indebtedness, including the effect of interest rate swap agreements designated as hedges. The impact of a 100-basis-point change in interest rates affecting our floating rate debt would result in a change in annual interest expense, including our interest rate swap agreements that are designated as hedges, of approximately $337 million. The interest rates on our existing long-term debt obligations are unaffected by changes to our credit ratings.
Interest Rate Swaps
We enter into interest rate swaps to achieve a targeted mix of fixed and variable rate debt. We principally receive fixed rates and pay variable rates, resulting in a net increase or decrease to Interest expense. These swaps are designated as fair value hedges and hedge against interest rate risk exposure of designated debt issuances. At September 30, 2025 and December 31, 2024, the fair value of the liability of these contracts was $4.7 billion and $5.3 billion, respectively. At September 30, 2025 and December 31, 2024, the total notional amount of the interest rate swaps was $23.0 billion and $24.0 billion, respectively.
Foreign Currency Risk
The functional currency for our foreign operations is primarily the local currency. The translation of income statement and balance sheet amounts of our foreign operations into U.S. dollars is recorded as cumulative translation adjustments, which are included in Accumulated other comprehensive loss in our condensed consolidated balance sheets. Gains and losses on foreign currency transactions are recorded in the condensed consolidated statements of income. At September 30, 2025, our primary translation exposure was to the British Pound Sterling, Euro, Australian Dollar and Swedish Krona.
Cross Currency Swaps
We have entered into cross currency swaps to exchange our British Pound Sterling, Euro, Swiss Franc, Canadian Dollar and Australian Dollar-denominated cash flows into U.S. dollars and to fix our cash payments in U.S. dollars, as well as to mitigate the impact of foreign currency transaction gains or losses. At September 30, 2025 and December 31, 2024, the fair value of the asset of these contracts was $1.4 billion and $500 million, respectively. At September 30, 2025 and December 31, 2024, the fair value of the liability of these contracts was $1.2 billion and $2.7 billion, respectively. At September 30, 2025 and December 31, 2024, the total notional amount of the cross currency swaps was $32.2 billion and $32.1 billion, respectively.
Foreign Exchange Forwards
We also have foreign exchange forwards which we use as an economic hedge but for which we have elected not to apply hedge accounting. We entered into Euro foreign exchange forwards to mitigate our foreign exchange rate risk related to non-functional currency denominated monetary assets and liabilities of international subsidiaries. At both September 30, 2025 and December 31, 2024, the fair value of the asset and liability of these contracts was insignificant. At September 30, 2025 and December 31, 2024, the total notional amount of the foreign exchange forwards was $750 million and $620 million, respectively.
Acquisitions and Divestitures
Spectrum License Transactions
From time to time, we enter into agreements to buy, sell or exchange spectrum licenses. We believe these spectrum license transactions have allowed us to continue to enhance the reliability of our wireless network while also resulting in a more efficient use of spectrum.
In February 2021, the Federal Communications Commission (FCC) concluded Auction 107 for C-Band wireless spectrum. In accordance with the rules applicable to the auction, Verizon was required to make payments for our allocable share of clearing costs incurred by, and incentive payments due to, the incumbent license holders associated with the auction, which were approximately $7.5 billion. During the nine months ended September 30, 2024, we made payments of $269 million for obligations related to clearing costs and accelerated clearing incentives. The carrying value of the wireless spectrum won in Auction 107 consists of all payments required to participate and purchase licenses in the auction, including Verizon's allocable share of
clearing costs incurred by, and incentive payments due to, the incumbent license holders associated with the auction that we were obligated to pay in order to acquire the licenses, as well as capitalized interest to the extent qualifying activities have occurred.
On October 17, 2024, Verizon entered into a license purchase agreement to acquire select spectrum licenses of United States Cellular Corporation (currently known as Array Digital Infrastructure, Inc.) and certain of its subsidiaries (collectively, UScellular) for total consideration of $1.0 billion, subject to certain potential adjustments. The closing of this transaction is subject to the receipt of regulatory approvals and other closing conditions, including the sale of UScellular's wireless operations and select spectrum assets to T-Mobile US, Inc., which concluded in August 2025, and the termination of certain post-closing arrangements with respect to that sale.
Frontier Communications Parent, Inc.
On September 4, 2024, Verizon entered into an Agreement and Plan of Merger (the Merger Agreement) to acquire Frontier, a U.S. provider of broadband internet and other communication services. The transaction is structured as a merger of the Company's subsidiary with and into Frontier, as a result of which Frontier will become a wholly owned subsidiary of the Company and shares of Frontier common stock outstanding immediately prior to the effective time of merger (subject to certain limited exceptions) will be cancelled and converted into the right to receive a per share merger consideration of $38.50, in cash. In November 2024, Frontier shareholders approved the transaction. It has also been approved by the FCC, the Department of Justice and certain state regulators. Consummation of the transaction is subject to receipt of certain remaining regulatory approvals and other customary closing conditions. Under certain circumstances, if the Merger Agreement is terminated, Frontier may be required to pay Verizon a termination fee of $320 million. Under certain other specified circumstances, Verizon may be required to pay Frontier a termination fee of $590 million.
Other
In October 2025, Verizon entered into an Agreement and Plan of Merger to acquire Starry Group Holdings, Inc., a fixed wireless broadband provider serving multi-dwelling units in five markets across the U.S. The closing of this transaction is subject to FCC approval and other customary closing conditions.
Cautionary Statement Concerning Forward-Looking Statements
In this report we have made forward-looking statements. These statements are based on our estimates and assumptions and are subject to risks and uncertainties. Forward-looking statements include the information concerning our possible or assumed future results of operations. Forward-looking statements also include those preceded or followed by the words "anticipates," "assumes," "believes," "estimates," "expects," "forecasts," "hopes," "intends," "plans," "targets" or similar expressions. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.
The following important factors, along with those discussed elsewhere in this report and in other filings with the Securities and Exchange Commission (SEC), could affect future results and could cause those results to differ materially from those expressed in the forward-looking statements:
•the effects of competition in the markets in which we operate, including the inability to successfully respond to competitive factors such as prices, promotional incentives and evolving consumer preferences;
•failure to take advantage of, or respond to competitors' use of, developments in technology, including artificial intelligence, and address changes in consumer demand;
•performance issues or delays in the deployment of our 5G network resulting in significant costs or a reduction in the anticipated benefits of the enhancement to our networks;
•the inability to implement our business strategy;
•adverse conditions in the U.S. and international economies, including inflation and changing interest rates in the markets in which we operate;
•changes to international trade and tariff policies and related economic and other impacts;
•cyberattacks impacting our networks or systems and any resulting financial or reputational impact;
•damage to our infrastructure or disruption of our operations from natural disasters, extreme weather conditions, acts of war, terrorist attacks or other hostile acts and any resulting financial or reputational impact;
•disruption of our key suppliers' or vendors' provisioning of products or services, including as a result of geopolitical factors, natural disasters or extreme weather conditions;
•material adverse changes in labor matters and any resulting financial or operational impact;
•damage to our reputation or brands;
•the impact of public health crises on our business, operations, employees and customers;
•changes in the regulatory environment in which we operate, including any increase in restrictions on our ability to operate our networks or businesses;
•allegations regarding the release of hazardous materials or pollutants into the environment from our, or our predecessors', network assets and any related government investigations, regulatory developments, litigation, penalties and other liability, remediation and compliance costs, operational impacts or reputational damage;
•our high level of indebtedness;
•significant litigation and any resulting material expenses incurred in defending against lawsuits or paying awards or settlements;
•an adverse change in the ratings afforded our debt securities by nationally accredited ratings organizations or adverse conditions in the credit markets affecting the cost, including interest rates, and/or availability of further financing;
•significant increases in benefit plan costs or lower investment returns on plan assets;
•changes in tax laws or regulations, or in their interpretation, or challenges to our tax positions, resulting in additional tax expense or liabilities;
•changes in accounting assumptions that regulatory agencies, including the SEC, may require or that result from changes in the accounting rules or their application, which could result in an impact on earnings; and
•risks associated with mergers, acquisitions, divestitures and other strategic transactions, including our ability to consummate the proposed acquisition of Frontier and obtain cost savings, synergies and other anticipated benefits within the expected time period or at all.
Verizon Communications Inc. published this content on October 29, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on October 29, 2025 at 17:11 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]