Verizon Communications Inc.
VZ · NYSE
Next quarter
Expected to report Jan 29, 2027 — estimated from last year’s reporting date.
Consensus is $1.15 EPS for Dec 2026 across 8 estimates, ranging $1.08 to $1.18.
VZ Sep 2026
- 3.15%
- $1.27
- $1.31
- —
- $34.31B
Reported results
- $34.31B
- $8.65B
- 25.21%
- $5.20B
- $1.25
Highlights
- Customer growth: Verizon added 406,000 postpaid phone lines, up more than 820% year over year and its strongest third-quarter result in five years; postpaid accounts grew by 137,000, the best quarter in over a decade.
- Earnings: Adjusted EPS of $1.31 beat the $1.27 consensus by 3.15% and rose 8.3% year over year; GAAP diluted EPS was $1.25, up 6.8%.
- Margin expansion: Adjusted EBITDA reached a record $13.8 billion, up 8.0% year over year, while adjusted EBITDA margin expanded 240 basis points to a record 40.2%.
- Service revenue: Mobility and broadband service revenue grew 2.9% year over year to $23.5 billion, accelerating from 2.8% in Q2 and 1.6% in Q1; Verizon expects approximately 4% growth in Q4.
- Cash generation: Free cash flow was $7.8 billion, up 12.1% year over year; nine-month free cash flow reached $18.0 billion, up 14.3%.
- Guidance raised again: For the third consecutive quarter, Verizon lifted its 2026 outlook, including adjusted EPS growth to 7.0%–7.5%, free cash flow growth to approach 12%, and postpaid phone net additions to 1.1–1.2 million.
- AI infrastructure: Verizon signed an AWS agreement valued at more than $2 billion and said signed AI Connect contracts total approximately $4 billion; the company expects revenue contribution to begin in 2027.
- Broadband and spectrum: Verizon added 314,000 broadband connections, including 155,000 fiber and 159,000 fixed wireless; it plans to use millimeter-wave spectrum to extend gigabit FWA coverage by 10–15 million premises.
- Capital returns and debt: Verizon returned $12.8 billion to shareholders in the first nine months, including $4.0 billion in repurchases; net unsecured debt to adjusted EBITDA was 2.3x, down 0.2x sequentially.
Analysis
Verizon’s third quarter paired a clear improvement in customer acquisition with stronger profitability and another upward revision to its full-year outlook. Adjusted EPS of $1.31 topped the $1.27 consensus by 3.15% and increased 8.3% from $1.21 a year earlier; GAAP diluted EPS was $1.25 versus $1.17. Revenue of $34.3 billion rose 1.5% year over year and was slightly above Q2’s $34.25 billion. The standout operating result was 406,000 postpaid phone net additions and 137,000 postpaid account additions, achieved alongside lower churn and sharply lower promotional acquisition and retention costs—not, management emphasized, through free lines or heavier subsidies.
That customer momentum supported 2.9% growth in mobility and broadband service revenue, while lower device upgrades reduced equipment revenue 9%. Cost control and a more favorable revenue mix helped push adjusted EBITDA to a record $13.8 billion and margin to 40.2%. Free cash flow rose 12.1% to $7.8 billion. Verizon raised its 2026 adjusted EPS growth outlook to 7.0%–7.5%, postpaid phone net-add guidance to 1.1–1.2 million, and free cash flow growth guidance to approach 12%. The other notable development was a growing AI infrastructure opportunity: AWS signed a deal worth more than $2 billion, and Verizon cited approximately $4 billion in total signed contracts, with revenue expected from 2027.
Postpaid customer momentum
- Phone additions: Postpaid phone net additions were 406,000, versus 44,000 in Q3 2025, and represented Verizon’s strongest third quarter in five years. Consumer contributed 266,000 additions and business mobility 140,000.
- Account growth: The company added 137,000 postpaid net accounts, its best quarterly result in over a decade. Management said the new lines and accounts were revenue-producing rather than free-line offers.
- Retention and acquisition costs: Overall postpaid phone churn improved 4 basis points year over year to 0.94%; Consumer churn was 0.87%, also down 4 basis points. Promotional acquisition costs fell 41% and retention costs 30%.
- Value proposition: Management attributed the stronger volumes and lower costs to offers including Simplicity and its loyalty program, along with a more segmented approach and lower reliance on device subsidies. Gross adds increased 11% year over year.
Profitability and revenue mix
Total operating revenue rose 1.5% year over year to $34.313 billion, compared with $33.821 billion in Q3 2025, and was broadly stable sequentially from $34.25 billion in Q2. Mobility and broadband service revenue increased 2.9% to approximately $23.5 billion, continuing its sequential acceleration; the company expects approximately 4% growth in Q4. This growth was partly offset by a 9.0% decline in wireless equipment revenue as upgrade volumes fell more than 20% year over year. Management linked the lower upgrades to longer device replacement cycles and its deliberate reduction in subsidies. Adjusted EBITDA rose 8.0% to $13.802 billion, while its margin reached a record 40.2%, up from 37.8% a year earlier. GAAP net income was $5.320 billion, up 5.2% year over year.
Cash flow and guidance
- Quarterly cash flow: Operating cash flow was $11.517 billion, up 2.2% year over year. Free cash flow reached $7.801 billion, up 12.1% and, according to management, the highest quarterly level since 2020.
- Year-to-date: Operating cash flow totaled $29.936 billion for the first nine months, versus $28.023 billion a year earlier; free cash flow was $18.010 billion, up 14.3%. Capital expenditures were $11.926 billion.
- Raised 2026 outlook: Adjusted EPS is now expected to grow 7.0%–7.5%, equivalent to $5.04–$5.06, versus the prior 6.0%–7.0% growth range. Free cash flow growth is expected to approach 12%, raised from 9%–10%; operating cash flow growth guidance is 3.5%–5.0%, up from 2.0%–4.0%.
- Operating targets: Full-year postpaid phone net additions guidance increased to 1.1–1.2 million. Mobility and broadband service revenue is expected to be in the upper half of the 2.5%–3.0% annual growth range, with Q4 growth of approximately 4%. Full-year capital expenditure guidance remains $16.0–$16.5 billion.
Broadband and millimeter wave
Verizon added 314,000 broadband connections in Q3: 155,000 fiber and 159,000 fixed wireless access. Its broadband base reached 17.4 million, including 11.1 million fiber and 6.4 million FWA connections. More than 55% of new fiber customers chose speeds of at least 1 gigabit, and management said broadband ARPU increased year over year. The company expects more than 32 million fiber passings by year-end and maintains a medium-term target of 40–50 million. A new gigabit FWA offering using its 1,700 MHz millimeter-wave spectrum is planned to scale from Q4 through 2027 and beyond; Verizon targets an additional 10–15 million premises covered with gigabit speeds, on top of its fiber footprint. Management framed this as both a lower-deployment-cost way to expand high-speed coverage and a means of adding capacity to the existing network.
AI infrastructure contracts
Verizon announced an AWS agreement valued at more than $2 billion, establishing a commercial framework to provide distributed compute and connectivity for AI workloads. Management said total signed AI Connect contracts are approximately $4 billion, including its previously announced Google agreement and deals involving edge computing. It described demand for dark and lit fiber and edge locations as strong, with additional hyperscalers, neocloud providers, and enterprise customers in discussions. Revenue from these contracts is expected to begin contributing in 2027, with attractive margins and modest, contract-linked capital requirements. Verizon said the 2026 capital expenditure outlook is unchanged and that related AI Connect investment is success-based.
Capital returns and leverage
- Shareholder returns: Verizon returned $12.8 billion in the first nine months of 2026, up 49% year over year, comprising $8.8 billion in dividends and $4.0 billion in share repurchases. It continued to expect up to $4.5 billion of repurchases for the full year.
- Debt position: Net unsecured debt was $123.7 billion at quarter-end, down from $128.7 billion at the end of Q2; the net unsecured debt-to-adjusted EBITDA ratio improved from 2.5x to 2.3x sequentially. Verizon said it remained on track to reach its target leverage range during 2027.
