Verizon thinks it had a good Q2

Verizon delivered another great quarter under new CEO Dan Schulman, a sign that his turnaround efforts are mostly paying off.

Q2 metrics

Mobility and broadband service revenue climbed 2.8%. Postpaid phone net additions totalled 184,000, marking its best Q2 performance in five years.

Total mobility and broadband net additions topped 550,000, a 230,000 increase over last year. Churn, or the rate at which customers leave, also decreased.

Not that exceptional

Revenue landed at $34.3 billion, down 0.7% year-over-year. Verizon noted that an increase in mobility and broadband revenue was offset by a $1.2 billion (20%) slump in equipment sales. That's because customers are keeping their devices longer, and the company has cut back on phone subsidies.

Net profit plummeted 22.9% year-over-year to $3.9 billion, weighed down by $1.8 billion in pre-tax charges.

Cost-cutting

Schulman's playbook relies heavily on cost-cutting. Verizon itself credited the Q2 results to "strict operational discipline" and "improved unit economics."

The company is also striving to become more customer-centric with moves such as the cost-efficient Simplicity plan and waived activation fees. But that added value is largely bankrolled by trimming device discounts and dialing back corporate stores.

Still, the strategy is working. Verizon expects total retail postpaid phone net additions in the upper half of the 750,000 to 1 million range, roughly 2 to 3 times its 2025 figures.

2025 isn't exactly a good benchmark, considering Verizon lost customers in three of the four quarters.

Zooming in

While Verizon is painting a rosy picture, not all is well under the hood. TMT analyst Walter Piecyk points out that postpaid account additions, Average Revenue Per Account (ARPA), and postpaid service revenue are all trending downward.

He believes that the improvements came from cost-cutting. Core revenue metrics likely took a hit, indicating that the business isn't actually growing.

Meanwhile, T-Mobile came out ahead in both Ookla's and Opensignal's recent reports, suggesting Verizon's network isn't noticeably improving either.

Stingier device discounts could push customers straight to rivals. For instance, T-Mobile offered better promos on Samsung's new foldable lineup, which is crucial because the new devices cost $100 more than their predecessors.

There are only so many corners to cut, and at some point, Verizon will need to figure out how to actually grow.