Verizon Ceo Schulman Shifts Away From Free Handsets

Verizon ceo Daniel Schulman said the carrier is moving away from free handsets and other highly promotional offers. He is steering the mix toward durable recurring service revenue and higher-value accounts. The shift comes after a first quarter with $34.44 billion in revenue and a positive market reaction.

Schulman’s $34.44 billion quarter

$34.44 billion in first-quarter revenue gave Verizon a base to press a profitability reset, even after the company experienced a January network outage. Schulman said the company is purposely shifting its mix toward durable recurring service revenues and away from low-margin, highly promotional activity, a move that puts less weight on blanket discounts and more on accounts that stay longer.

$1.28 in adjusted earnings per share came in 5.8% above the $1.21 estimate. That beat, alongside adjusted EBITDA of $13.4 billion, gave Verizon room to talk about execution rather than recovery. The operating margin was 23.9% in the quarter, below the 38.9% estimate embedded in the fact set, a gap that keeps the focus on mix rather than volume.

Verizon’s promo reset

2.9% year-on-year revenue growth on $34.44 billion suggests the company is still adding business, but Schulman said the focus is no longer simple line growth. He said Verizon is shifting focus from line growth to high-quality accounts and using micro-segmentation to customize offers, which means the company is trying to avoid paying for customers who do not stay long enough to justify the subsidy.

$5 billion in ongoing operating expense savings gives that strategy a second leg. Anthony Skiadas said the savings are coming from network streamlining, workforce reductions, and digital channel adoption, while Schulman said Verizon has a multi-layered AI stack already delivering improvements in customer satisfaction, network reliability, and operational efficiency.

Buybacks and broadband

$3 billion in buybacks remains part of the capital plan, according to Skiadas, even as Verizon keeps pushing broadband expansion. Schulman also indicated continued aggressive broadband expansion, and the company is integrating Frontier, which leaves the carrier balancing growth spending with the tighter promotion model he described.

That is the friction in the story: Verizon is still spending on expansion and repurchases while trying to pull more profit from each customer relationship. If ARPA and account net adds improve as promotional amortization pressures subside, the carrier can lean less on handset giveaways and more on service revenue that repeats every month.