By Harshita Mary Varghese
(Reuters) -Verizon Communications on Friday reported its best quarterly wireless subscriber growth in five years, fueled by robust demand for its customizable myPlan, Black Friday deals and trade-in offers for the AI-powered iPhone 16 series.
The strong growth sent its shares up about 1% and helped investors look past annual profit and free cash flow forecasts that were below Wall Street estimates.
Verizon (NYSE:VZ) has been pouring billions of dollars into the C-band spectrum, prized for its balance of speed and range, to improve its 5G offering and outpace rivals AT&T (NYSE:T) and T-Mobile.
The spending is also key to achieving the company's goal of securing up to 9 million subscribers for the fixed wireless service by 2028.
On Friday, the company unveiled Verizon AI Connect, a set of products and solutions designed for businesses to manage artificial intelligence workloads at scale, as it looks to capitalize on growing use of the booming technology.
Verizon expects 2025 adjusted profit to grow between 0% and 3%, with the midpoint coming in below analysts' estimates for growth of 2.7%, according to data compiled by LSEG.
Free cash flow, a metric that helps investors determine dividend, is expected to be between $17.5 billion and $18.5 billion this year. The midpoint was below estimates of $18.44 billion, according to Visible Alpha.
In October, Verizon projected capital spending for 2025 between $17.5 billion and $18.5 billion, compared with $17.1 billion in 2024.
In the fourth quarter, the company added 568,000 monthly bill-paying wireless subscribers, outpacing FactSet estimates of 487,500 additions. It benefited from price increases implemented in 2024 and the popularity of myPlan, which comes with streaming perks including Disney+, Hulu and Max at an extra cost.
"The wireless market is highly competitive, and Verizon has recently increased handset promotional activity and simplified pricing to attract and retain consumer subscribers," said Dave Heger, communications services analyst at Edward Jones.
More than half of Verizon's mobile customer base is on myPlan.
Wireless equipment revenue grew about 1% to $7.5 billion in the fourth quarter thanks to higher device upgrade volumes. Overall revenue was $35.7 billion, slightly above estimates of $35.32 billion.