Good morning, and welcome to Verizon's first quarter 2026 earnings conference call.

Good morning, and welcome to our first quarter 2026 earnings call. I'm Colleen Ostrowski, and on the call with me this morning are our Chief Executive Officer, Dan Schulman, and Tony Skiadis, our CFO. Before we begin, I'd like to point you to our safe harbor statement, which can be found in the earnings presentation and on our Investor Relations website. Our comments this morning may include forward-looking statements, which are subject to risks and uncertainties. Factors that may affect future results are discussed in our SEC filings. This presentation also contains non-GAAP financial measures, and you can find reconciliations of these measures in the materials on our website. Finally, as a reminder, the results of Frontier Communications are included in our financial and operating results beginning on January 20, 2026, the date we close the Frontier acquisition. With that, I'll turn it over to Dan.

Thank you, Colleen, and good morning, everyone. When I joined Verizon, I had a simple but ambitious goal. I wanted Verizon to reclaim its market leadership. Obviously, there are a lot of things we need to do right to make that happen. We need to delight our customers and put them at the center of everything we do. We need to drive consistent and fiscally responsible subscriber and revenue growth. We need to keep more of our customers as measured by our churn rate and convert that into stronger, more predictable cash generation for our shareholders. With all that in mind, we ended last year with our strongest quarter of mobility and broadband net ads, and we entered 2026 with a clear set of priorities, a step function improvement and guidance, and a realistic plan. Today, our first quarter results show that our turnaround is not only progressing, it is gaining momentum, powered by a comprehensive transformation program that is reshaping how we operate and serve our customers. I'm also very pleased that our East Union's four-year contract that we believe will enable us to better serve. Let me start by operating metrics, and we translated that performance into solid operational and financial outcomes. some of which we haven't seen in over a decade. I'll briefly review the key highlights of the quarter, including the impact of the network outage we experienced earlier in January. Then I'll walk through three key themes, how we will continue to drive healthier growth, second, how we will accomplish that with meaningfully better customer economics, and finally, how that leads results and the transformation work underway support an increase in our 2026 guidance for both our adjusted EPS growth and our post-paid phone net ads. In the first quarter, total revenues grew 2.9% to 34.4%. Reported mobility and broadband service revenue grew below our annual guided range. Our reported growth includes one-time pressure on our wireless service revenues from customer credits and other impacts related to our network outage. We ended the quarter with momentum, with March mobility and broadband service revenue growing in the middle of our guidance range. With consumer wireless service revenue, a participate Q1 mobility and broadband service revenues will be the low point of 2026. And we are highly confident that our forecast for mobility and broadband service revenue growth is in line with our 2% to 3% guidance for the year. Our revenue is improving. We are purposely shifting our mix towards durable, recurring service revenues and away from low-margin, highly promotional activity. We are prioritizing customer lifetime value over short-term revenue maximization. The benefits of that approach are obvious when looking at the combination of positive post-paid phone net ads, better churn, lower acquisition and retention costs, and higher free cash flow and 1,000 postpaid phone net ads in the quarter. That represents a continuation of the momentum we established in Q4 of last year, and it is happening while we are also improving the overall quality and economics of our customer relationships. I'm particularly pleased to see the early results of our transformation efforts on our customer retention. Consumer post-paid phone churn in the quarter was 90 basis points, a sequential improvement of five basis points from Q4. Importantly, churn improved throughout the quarter, and in March, consumer post-paid phone churn improved further to below 85 basis. Significant improvement both sequentially from Q4 and within the quarter, and it reversed the upward pressure we had seen in turn over the past several years. As expected, when we stop imposing blunt price increases without corresponding value on our customers and begin to remove friction from the end-to-end customer experience, they reward us with their loyalty. At the same time, we are acquiring and retaining customers far more efficiently. Our cost of acquisition and retention in March was down approximately 35% relative to the end of Q4, and we expect to maintain a lower cost of acquisition and retention as we look forward. I would point out that we accomplished these meaningful cost reductions while still delivering increasingly positive post-paid phone net ads versus a year ago. We are predominantly reliant on expensive promotions to drive our growth, and we are doing so in a much more disciplined, repeatable, and fiscally responsible manner. We, of course, retain the flexibility and conviction to defend our base and have a large war chest, if necessary, to react to competitive moves. Trends in churn and unit economics are lifting our consumer lifetime value and are already flowing through. So point out, we'll benefit our future revenue growth as the headwinds of promotion amortization finally begin. Adjusted earnings per share for the quarter were $1.28, up 7.6% year-over-year, our highest adjusted EPS growth rate in over four years. Free cash flow is approximately $3.8 billion, up 4% year-over-year, and represents a strong start. Our performance is consistent with and in a few key areas ahead of the guidance we laid out for 2026, driven by a better customer experience and operating efficient foundation for the capital allocation priorities we have outlined, network excellence, and our overall value proposition, maintaining our ironclad commitment I mentioned earlier, healthier growth, stronger cash generates healthier growth. The story in mobility and broadband is that we are now consistently adding more dramatic momentum into Q2. Consumer customer service team delivered its solution and our footprint solidly on track to have more than 32 million fiber in the journey of fully monetizing the combination of best-in-class mobility and our net ads. Customers of value having more of their connectivity needs met by a single frontier integration is on track. And I'm extremely pleased with the level of teamwork and focus from go-to-market execution to network integration, and all with a keen focus on driving convergence and delivering on our more than $1 billion of run rate operating cost synergies by 2028. Now let me turn towards our second theme, which revolves around driving better economics. The improvements in churn, acquisition costs, and retention costs are not one-off events. They are the result of specific choices we have made over the past 200 days and the early benefits of a broader transformation we have launched across ambitious work streams span everything from becoming an AI-first company to reducing friction in every step of the customer journey to re-examining outdated internal policies and procedures that slow us down and add to bureaucracy. We aim to simplify our products and services, apply micro-segmentation to better match offers to customer needs, of being the most efficient telco in the work stream as a dedicated cross-process that reviews progress, unblocks issues, and reallocates resources to run the company day-to-day. As I've mentioned before, we will not rely on empty across-the-board price increases that create short-term financial gains but erode the long-term trust of delight customers. A central pillar of our upcoming new value proposition is the end-to-end redesign of our customer experiences to ensure we delight Here's how we communicate with our customers, generation of offers built around the principles of transparency, simplicity, and genuine value delivery. We have begun to embed AI and automation into our operations and customer interactions, which is already to encourage more volume into digital sales and service channels, which lowers costs, increases engagement, and inspection. and we have begun to see meaningful cost benefits from our transformation efforts as we take out legacy structural costs. Consequently, we are well on our way towards our OPEX savings target of $5 billion in customers. When we achieve the kind of churn benefits we did during the first quarter, positive implications for our business model. Every cohort now contributes more revenue, more margin, and more cash. That effect compounds over time. Lower churn also makes our marketing dollars work harder because we are not simply replacing customers who leave. Our advertising is also evolving, as exemplified by our Connor Story brand advertisement. Same is true for acquisition and retention economics. We were able to meaningfully drive year-over-year improvement in our post-paid phone net ads, while driving the cost of acquisition and retention lower by approximately 35%. Obviously, this fundamentally changes the return on investment we make to attract and keep our customers. And as I mentioned, the less we spend on headwinds are doing in our transformation streams, smarter channel mix, less friction, better tools and modeling, processes, and a tighter focus on fiscally responsible offers that drive profitable growth. We expect these more efficient levels to be sustainable under our current strategy, and we see additional opportunities to further improve our trends as our transformation matures. Finally, our third theme revolves around stronger cash. Healthier subscriber growth and better economics is evident and are confident in our disciplined capital program, where we continue to invest in capacity, coverage, and reliability, but do so with sharper prioritization and better utilization of the assets we already have. We are also continuing to execute on our operating expense initiatives, which are delivering a substantial war test to continue our investments in driving our end-to-end value proposition while driving continued shareholder returns. We see room for further meaningful efficiencies in the years ahead while simultaneously advancing our primary goal of delighting our customers and by doing so, driving long-term sustainable revenue growth. We have also discussed in our previous earning calls that we aim to drive incremental margin By eliminating sun-setting, we're creating structures to dramatically reduce our exposure to non-core assets. We are well underway in this journey, and we look forward to sharing more details shortly. All that brings me to our updated outlook. On the back of our first quarter performance, the leading indicators we see in our business and the traction we are seeing in our transformation work streams, We are raising our guidance for adjusted EPS growth to 5% to 6% versus the prior range of 4%. We also now anticipate our post-paid phone net ads to be in the upper half of our $750,000 to $1 million range. We are reaffirming the balance of our guidance, mobility and broadband service revenue growth of 2% to 3%, with Q1 being the low point of 2026 and free cash flow growth of approximately 7% or more versus last year. We are making these changes early in the year because the data supports a higher level of confidence. We are ahead of pace on PostBate phone net ads and doing so with lower churn, better unit economics, and record customer satisfaction scores. We have clear line of sight to the remaining cost and capital efficiency actions that underpin our free cash flow target. And the transformation program gives us additional levers as the year progresses. At the same time, we are far from assuming a perfect environment. We operate in a dynamic and rapidly changing landscape. Our revised guidance continues to reflect a prudent view of competitive dynamics and the macro-political and economic environment. Our capital allocation priorities remain unchanged. We will continue to invest in our network, our platforms, and our people to deliver the reliability and experiences our customers expect. We will, of course, maintain a strong and sustainable dividend, reflecting the cash-generating nature of our business. And as Tony will discuss, we are delivering on our commitment to return capital. We will continue to use excess cash to strengthen our balance sheet over time, giving us flexibility as markets and opportunities evolve. And we remain on track to return to our target leverage ratio. To summarize, in the first quarter of 2026, Verizon grew underlying mobility and broadband service revenue in line with our annual guidance. Delivered positive post-paid phone net ads in Q1 for the first time in 30 years. Exited the quarter with consumer post-paid phone churn below 85 basis points, significantly lowering both acquisition and retention costs, driving our best adjusted EPS growth in four years and delivering strong. We did all of this by addressing a significant network event transparently and decisively. At the same time, we have launched and are executing against a 10-stream transformation program that is making Verizon an AI-first, simpler, more efficient, and more customer-centric company. On the strength of that performance, the transformation work already underway, and the trends we see in the business, we are raising our adjusted EPS growth outlook to 5% to 6%, and we anticipate our post-paid phone net ads will be in the upper half of our guided range, cash flow, and we still have much to accomplish. And we are far from our longer term aspiration of travel efficiently by executing on agenda. And we are converting all to provide more detail on the quarterly results. Thanks, Dan, and good morning. Our first quarter results

reflect a strong start to the year. We built upon the operational momentum from the fourth quarter and continued executing on our transformation efforts to deliver on both volume and financial growth. Dan has discussed our plan to deliver long-term sustainable financial and operational growth, and our first quarter results show the early impacts of that plan. We're on track to deliver our 2026 guidance, including increased guidance for post-paid phone net ads and adjusted EPS growth. In mobility, we are pleased that for the first time since 2013, we generated positive first quarter total postpaid phone net additions. So 55,000 included significantly better performance from both our consumer and business segments. Consumer postpaid phone net losses were 35,000, a 321,000 improvement year over year, driven by a higher mix of new to Verizon gross ads. In total, the year over year improvement of 344,000 reflects our consistent and disciplined and go-to-market approach, solid execution of our volume growth strategy, and steady progress with churn. While there is more work to be done with customer experience, which is the largest component of our transformation plan, we're pleased to see early signs of progress towards our goals. Total postpaid phone churn was down five basis points sequentially to .97%. Postpaid phone churn was .90%, down five basis points sequentially, and improved throughout the quarter as we took actions to delight, we grew our customer base for the seventh consecutive quarter. We delivered 115,000 net ads and total wireless brands, demonstrating the continuing strength of our prepaid business and our segmentation approach, optimizing the value of each of these brands as we continue our transformation. Shifting to broadband, we continued to take share in the first quarter and delivered 341,000 broadband net ads. This includes 214,000 fixed wireless access net ads and 127,000 fiber net ads. We now have approximately 16.8 million broadband subscribers in the long-term success of our broadband strategy. Opportunity to grow our broadband subscribers as well as our converged offerings, a key enabler to growing wireless share in underpenetrated frontier markets. Porter, in addition to Frontier, we've also closed a starry transaction, an investment that will enable us to drive further broadband growth opportunities in multi-dwelling units within urban areas. We're pleased with our operating as we have seen significant improvement in our net ads. We look forward to continuing our commercial momentum throughout the year. Now, let's turn to our consolidated financial results. Financial results show our disciplined execution is directly translating into operating leverage. We are driving financial growth and strong free cash flow, even as we undergo a transitional year for revenue. Mobility and broadband service revenue was $22.9 billion for the first quarter, a 1.6% increase year-over-year. This result includes $20.6 billion of wireless service revenue, which was down 1% year-over-year. Customer credits associated with the network outage reduced first quarter wireless service revenue by approximately 80 basis points. As previously communicated, we continue to absorb elevated promotional amortization pressures and are lapping approximately 180 basis points of pricing impacts implemented in the prior year. We expect to improve upon our first quarter's wireless service revenue performance by maintaining low churn, being disciplined around cost of acquisition and cost of retention, and continuing to drive net ads. Additionally, we continue to see strong performance with PERC adoption, continued growth in premium base mix, and prepaid. Given these factors, we are confident we will achieve our full-year revenue guidance and expect to have an even stronger and more sustainable revenue profile by the end of 2026. Our disciplined financial approach and targeted actions led to strong profitability this quarter. Consolidated adjusted EBITDA was $13.4 billion, a 6.7% increase in the prior year. Adjusted EBITDA margin of 38.9%, expanded by 140 basis points. This represents our highest ever reported adjusted EBITDA performance, and we expect it to be an industry-leading result. We are growing responsibly with healthy economics and both the cost of acquisition and cost of retention. We are also making significant tangible progress with our cost efficiencies. During the quarter, we realized substantial savings in key areas, including advertising, network operating expenses, and workforce-related costs. A significant portion of these savings dropped directly to the bottom line while we simultaneously reinvested a portion back into the customer experience. Our integration of Frontier Operations is progressing well. We are on track to deliver over $1 billion in run rate operating cost synergies by 2028. While there is more work ahead to drive further effect delivering our $5 billion of operating expense savings target for 2026. Our focus on the customer and our cost discipline drove adjusted EPS of $1.28, up 7.6% year-over-year, even as we incurred the incremental depreciation and interest expense associated with the frontier acquisition. Our performance reflects our responsible growth and our actions taken to streamline the business to make us more agile in serving our customers. This gives us the confidence to raise our guidance for adjusted EPS growth for the full year to 5% to 6%. Now, let's turn to our cash flow and balance sheet. Our financial foundation has never been stronger. Our cash flow generation remains a cornerstone of our financial strength and a testament to our high-quality earnings. Cash flow from operating activities was $8 billion for the first quarter. We achieved this strong result even after absorbing severance payments of approximately $1.1 billion related to our restructuring efforts, incurring costs associated with the frontier integration and delivering higher gross ad volumes. We're on track to achieve our CapEx guidance of $16 to $16.5 billion for the full year. Capital expenditures for the quarter were $4.2 billion. We continue to invest strategically for network excellence and future growth opportunities in a disciplined way by prioritizing our wireless and fiber builds. As Dan mentioned, we expect to end the year with more than 32 million fiber passing. for the quarter was $3.8 billion, up 4% year over year. We expect our free cash flow performance to ramp as we further realize the full run rate of our operating expense savings and grow volumes responsibly. We are on track to deliver our full year free cash flow guidance of $21.5 billion or more. Our robust cash flow enables a seamless execution of our capital allocation framework, including investing in our business, maintaining a strong dividend, strengthening our balance sheet, and returning additional value to shareholders through stock buyback. Consolidated adjusted EBITDA ratio increased due to the acquisition of Frontier to approximately 2.6 times at the end of the quarter. We are making good progress and have paid down about half of the Frontier debt since the acquisition closed, and we expect to repay substantially all of Frontier's debt by the end of the year. We remain firmly on track to achieve our target net unsecured leverage ratio of 2.0 to 2.25 times during the 2027 timeframe. Lastly, we are delivering on our commitment to enhance shareholder returns. In January, we declared an annualized dividend increase of $0.07 per share of 2.5% from our prior annual dividend rate. This marks the 20th consecutive year of dividend increases, a track record we're extremely proud of. In addition, our stock buyback program is off to a strong start. We successfully completed $2.5 billion in share repurchases during the first quarter. We are in a position of significant financial strength, generating the cash necessary to invest in our future, reward our shareholders, and maintain a healthy balance sheet. In summary, our function change and our performance trajectory. We delivered positive first quarter total postpaid phone net ads for the first time since 2013 and raised our full-year phone net ad outlook. We achieved our best adjusted EBITDA in history, And we also delivered our best quarterly adjusted EPS growth rate since 2021 and raised our full-year adjusted EPS guidance. We returned a significant amount of capital to our shareholders, including commencing our first share buyback in over a decade. Our first quarter results demonstrate that our transformation is gaining momentum and we're delivering on our plan. This is the new Verizon playing to win. With that, I will now hand the call over to Colleen to take your questions.

Thank you, Tony. Brad, we are now ready to take questions. As a reminder, we would ask you to please limit yourself to one question.

Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star 1 on your touchtone phone. Please unmute your phone and record your name clearly when prompted. Your name is required to introduce your question. If at any point your question has been answered or you would like to withdraw your request, you may remove yourself by pressing star two. One moment, please, for the first question. Your first question will come from Michael Rollins of Citi. Your line is open, sir.

Thanks. Good morning, and congratulations on the early progress. I'm curious if you could discuss the performance of accounts in ARPA with the DENSEC in the quarter, as well as what that means for the go-forward outlook for these measures, including how the current promotional environment and your pricing strategy are influencing the performance. Thanks.

I think I'll jump on that, Mike, and then we'll, Tony can add color. Look, I think if we take a step back, you know, clear thing we do around a customer-centric definition, that means that we're thinking about the cash lines. And I would say previously, the company predominantly focused on lines, and that's just not our approach going forward. Focus on account net ads year over year in both, and that's in the same quarter we delivered 13 years, and that's not a coincidence. You know, a customer-centric approach on both fronts. The net ads due to Verizon continues to climb, and that's a leading indicator of where our account number is headed net revenue. No longer giving away lines. I think there are a lot of different ways that we can do that. We can do that through convergence, discipline. We're going to start headwinds and, you know, on the network outage and to immediately give them credits because we absolutely always want to do the right thing about the way we react. Obviously, that's a one-time event and doesn't come up. I would say, in general, we expect to see account net ads continue to improve, as well as ARPA, as we go through 2026 and as we go into 2027.

Yeah, just to add a couple things to that, Mike. You know, we exited the quarter with good momentum. You know, the team's focused on writing good business, and the new Verizon's up 150 basis points, which is great to see. We see a lot of opportunities with convergence, and we saw that in the quarter with bringing Frontier to the fold. And then also we've done a lot of work on bringing value to customers, things like perks. We've seen significant uptake in perks, step-ups, and, of course, in FWA. So as Dan mentioned, you know, we do expect improvements in ARPA as the year progresses. And, you know, as we continue to reduce our reliance on expensive promotions, that will obviously reduce the head memorization as we move ahead. So that's how we're thinking about it.

Brad, let's take the next question.

The next question will come from Michael Ng of Goldman Sachs. Your line is open.

Good morning. Thanks for the question. I wanted to ask about upgrade rates and the changing approach to device subsidies. What are you expecting around upgrade activity for the rest of the year, and how do you balance improved profits on some of these lower device subsidies versus opportunities to use devices to drive gross ads, given that it should be a strong device for fresh air? Thank you.

You know, I would say both cost of acquisition and our cost of retention, you know, the improvements that we saw throughout the quarter, these are for seasonal, that the patient really exactly want discipline. Think about retention. You know, not every retention is going to be a free handset. In fact, quite the opposite. I mean, I think our industry has been too dependent. Solution, start to micro-segment, really listen to our wants and not just give them a free handset for everything. So I'll give you an example of that. You know, if a customer calls us, a difficulty, you know, with service in their home, previously what we would have done is send them a free so that they wouldn't churn. And what would happen at that point is a customer would have a nice new handset and still had like $1,000 and did not sell the customer. If we had listened and sent a femtocell to be installed at the house, we could have done that at one-third the cost and made the customer happy. And so that's what's happening right now. We're listening to what customers really want. We're customizing offers to exactly their needs. They're moving away, confiscated, and as we continue to micro-segment, we're going to become much, much better at this. And so I think continue to do manner in the economics.

Well, just a couple of things to add to that. So obviously the strong cash flow generation that we have in the business gives us a lot of optionality and scenario planning. You know, in the quarter, we were able to absorb about 6% a year, you know, be more surgical, as Dan mentioned, with retention offers and also having strong cash flow. And the one thing I can say is the rate of growth in upgrades has slowed the last couple of months and into the second quarter, and that's both reflective of the work, particularly on retention and being very segmented in our approach and very disciplined, and also customer choice, customers, you know, choosing to hang on to their phones for longer periods of time. Obviously, we don't guide on this, but we'll see how it plays out, but we're being very disciplined in our approach.

Thanks, Dan. Thanks, Tony.

Let's take the next question, please.

The next question will come from John Hudlick of UBS. Your line is open, sir.

Great, thanks. Maybe two, if I could. First, on the cost cutting, maybe for Tony, any color on sort of how much of the $5 billion in OPEC savings we've seen thus far and how it ramps through the year? And then, you know, a lot of sort of bullish commentary on volume trends in the wireless business on how should we expect the fixed wireless and fiber broadband trends to sort of play out through the year

as you sort of digest the fiber assets and get the converged offerings sort of up to speed.

Sure. Good morning, John. So on the cost transformation, let me just start big picture. So obviously we're making significant progress on the transformation work and the cost work, and it's showing up in the EBITDA. And as we said in the prepared remarks, you know, We expect EBITDA to grow at a faster rate than adjusted EPS when you factor in both the frontier acquisition interest expense, which is about a billion dollars, and also the depreciation from the asset base, which is about a billion and a half. And obviously, you know, we had good acceleration EBITDA and really good operating leverage. And to your question, you know, we're off to a great start on the $5 billion of cost transformation, and we're seeing proof quarter. Maybe I can break down between the first quarter and also what's in progress and coming ahead. First and foremost, on the network side and network operating costs, the team's doing a great job in continuing to decommission legacy elements in the network, and that includes copper and recycling that copper and also monetizing that copper, as well as optimizing our third-party access costs with our larger footprint. And there's a lot more we can do here when you think about Frontier coming into the fold. Second, from an advertising and marketing perspective, continued efficiencies in our spend, including use of digital. And then Dan mentioned our cost of acquisition, cost of retention, structural improvements there since year-end, and particularly on cost of retention, really being targeted with our retention spend. And then from a workforce perspective, we're exiting the first quarter, we're running leaner with the $13,000 reduction behind us, as well as reducing. And then in terms of what's the opportunities ahead and things that are underway, we talked about the prepared remarks around customer experience, and that is the largest part of the information program, and that's addressing customer pain points, as Dan mentioned. If you think about both the IT and the real estate continuing to rationalize IT platforms, including AI enablement, synergies by 2028, and those synergies ramp, execute on our integration plans. And as we continue through the cost transformation, The expectation is that we'll continue to further reduce costs beyond 2026. And then when you put that together, the EBITDA and the cost reductions allow us to do a number of things a lot more efficiently. The transitional year that we have, that includes defending our base if we need to do so. And lastly, returning a significant amount of capital to shareholders. And overall, we see a great path to both adjusted EBITDA and EPS growth for the year. And that gave us the confidence to raise for the year. And then I'll hand the question, John.

Convergence, obviously, is one of our key vectors of growth. We intend to fully leverage our growing fiber footprint. As I mentioned in the last earnings call, we're still very focused on driving our fiber footprint 40 to 50 million over and expanding our fixed wireless access capacity. You know, in Q1, advantages over FWA, and we're going to prioritize it, and therefore you should expect a mixed shift, you know, from where we've previously economics on both percent less on converged offers, and it has a higher of both LTV and ARPA. However, be sure we're going to continue to drive FWA and capacity in our network for fixed wireless access 2025, and we intend to take advantage of that. You know, Q1 is seasonally our slowest quarter, but even so, we added, and by the way, that excluded the first 20 days of January for Frontier. You can probably do the math on what our numbers could have been on broadband had we had where we are in our broad positions, and we expect to see that as we go forward. We're going to continue to invest heavily in broadband. We're looking at more partnerships, potential acquisitions to speed the number of homes passed. There's no question we think that fiber is a key differentiator against competitors who don't have it. And I'd also, I think it's best.

Great. Thank you both.

Next question.

Yeah, you bet.

Next question, please.

The next question will come from Sebastiano Petty of JPMorgan. Your line is open.

Hi, thank you for taking the question. Dan, just a quick follow-up to John's question there. Just in regards to your FWA commentary, I mean, should we still anticipate 8 to 9 million FWA subs by 2028? Is that still a target for the managing team? That's my first question. And then, Tony, the buyback is $2.5 billion. Great to see in the quarter. You're not surprised given the momentum. How should we think about the expectations for buyback in 2026? I think you previously talked about $3 billion. It clearly seems conservative at this point, and I didn't see any commentary on the press release. But, I mean, how should we think about the, I guess, phasing or cadence of buybacks from here over the multiyear period? Thank you very much.

Yeah, I'll first jump on the FWA question. I don't think you should really adjust any of your thoughts going to drive. Again, there may be more. I'll continue to drive it.

Yeah, and that's the best, John, on your question on capital allocation. I mean, look, as we said in the remarks earlier, the pillars are the same. You know, our first priority is still investing in the business, and you see us doing that with our capital program of $16 to $16.5 billion and our acquisition of Frontier as well. The dividend is still ironclad for us, and we raised the dividend. back in January, and that's the 20th consecutive year. And the third is having a strong balance sheet and paying down debt. And as we said, there's no change to our long-term leverage targets, and we said we'd be there in the 2027 timeframe. We've also paid down about half of Frontier's debt stack already, so we're well on our way there. And then fourth, as you mentioned, you know, we have our share buyback program underway. We did $2.5 billion of share repurchase in the first quarter, so we're off to a great start. And that reflects the strong cash generation and the conviction, our conviction, and the value of the stock at current levels. You know, in terms of your question, I can't talk about hypotheticals. You know, look, if we have additional excess cash flow beyond our plan and maintain our leverage commitments and, you know, invest in the business and things like that, you know, we would have the ability to do more. But, you know, our plan of at least $3 billion is high. But the overall goal doesn't change. It's generating strong cash flows and being able to execute across all four pillars of our capital allocation strategy and doing that simultaneously. As you saw, we returned a significant amount of capital to shareholders. It was $5.4 billion in the first quarter. And we're doing all of this while we're executing on our transformation plan as well.

Great. Thank you both.

Next question, please.

The next question comes from Sean Diffley of Morgan Stanley. Your line is open.

Thanks very much, Dan. You spoke recently about AI transforming the economy and impacting jobs. I was hoping you could elaborate a bit on how you think about the ability to take out more costs across the business. Obviously, you referenced it a bit on the OpEx commentary. But any tangible examples of AI use cases that are being implemented at Verizon, how you think about total headcount growth over time? And then one on CapEx, can you elaborate on investing in wireless versus fiber and anything

to say on spectrum acquisition interest going forward? Thanks very much. Let me jump on the AI. Obviously, we live in not just AI. I think it's important we openly talk about it and talk about the implications or potential implications of it. I also feel it is absolutely essential that Verizon uses the tools of this era to compete. I want us to be not an AI-first company. I want us to be an AI native. I think there are three utilized efficiency. You know, take the second, satisfaction improvements. How can we better serve through the year? And then, finally, how do I get capabilities into our value proposition? Micro-segment down to the company. We call it every customer. And that is a passion. And that is where we move our data, structured, unstructured, external data, into creating customized propositions for every individual customer. You know, our AI tech stack, again, huge, structured and unstructured, putting it into the right formats, the things. We are going to be a project on this. Obviously, with Anthropic, we are part of Glasswing. We are working with Mythos for some time, and it has given us great insight, reliable. have been, again, we are testing these models and we are fine-tuning them. One delivery, a ton of money. In the network, we have really deployed quite 85 of all of our issues right now are autonomously resolved. That means we are resolving issues before our customers even see them. We used to have in our network, like the bill of material, it was over like 1 million different combinations. Think about the cost and the complexity around that. Using AI, we've driven that down now to about 20 kits. And so how we can optimize on energy and weird side, integrate our potential. I believe we have time to take one more question.

Yes, your final question will come from Michael Funk

of America. Your line is open, sir. Yeah, great. Thank you guys for fitting me in. So Dan, one for you. The theme of the call has clearly been customer lifetime value and micro-segmenting as well. So just kind of curious about the save budget as part of that micro-segmenting and churn reduction effort, and how much you've improved or increased the save budget, how that might impact the repricing of the back book, and one follow-up, do you still expect your post-paid phone net ads to be 10% to 15% of the net now?

Okay. A lot of different questions in there. One, on a post-paid phone, one thing I would say, though, on that, I think it's obvious now that improvements will be reduced because the bottom 95 bits in Q4, 90 bits overall in Q1 is a corresponding value to do and is a differentiating thing and hard for others. You put out a price plan, people can follow that. You put out a promotion, people can follow that. That comes day by day, one initiative after another to make that happen and to see you know, an all-time record of our customer satisfaction service teams. And cost of retention, you know, the cost of retention and cost of acquisition have come down substantially. It has to do with micro-segmentation and really understanding what a customer needs. You know, the era of that, you know, it's last year's model that's been refurbished.

Thank you, Dan, for that.

That's all the time we have for questions. Thank you all for your time today.

This concludes the conference call for today. Thank you for your participation and for using Verizon Conference Services. You may now disconnect.