Overview
Verizon Communications
VZ · NYSEQ3 2026Telecommunications · Wireless and Broadband
Since the Report + 1.0%
Revenue grew 1.5% year over year, EPS beat the estimate by 3.1%; the stock fell 3.5% in its first reaction.
- RevenueQ3
- $34.31B
- Estimate $34.85B · 1.5% Below
- EPSAdjusted
- $1.31
- Estimate $1.27 · 3.1% Beat
Verdict
HOLDVerizon beat third-quarter earnings expectations by 3.1% but missed on revenue by 1.5%, and raised its full-year outlook for the third time. The stock closed down 3.5%; the market looked past subscriber gains to a revenue miss driven by device sales. The next test is service revenue growth, guided to about 4% in the fourth quarter.
Close on Report DayOct 26
$43.10▼ 3.5%Report-Day Move
- Market Cap(Today)
- ≈ $181 B
- 1Y Return(At Report)
- + 10%
- P/E(At Today's Price · $4.98 · Trailing 12M)
- 8.7
- PEG(Company Guidance 2026)
- 1.21
- Net Margin(Trailing 12M)
- 11.6%
Earnings Summary
In 30 Seconds- Verizon beat earnings expectations by 3.1%, but revenue of $34.31 billion came in 1.5% below the estimate.
- Postpaid phone net additions rose to 406,000, and the company raised full-year EPS guidance to $5.04-$5.06.
- The stock closed down 3.5% as the market focused on revenue held back by a 9% drop in device sales.
The Numbers
Adjusted EBITDA Margin
40.2%
Year Ago 37.8% · Up 2.4 Points
Postpaid Phone Net Adds
406K
▲ Over 820% Year Over Year
Free Cash Flow
$7.80B
▲ 12.1% YoY · $18.0B Over 9 Months
Stock Reaction
−3.5%
Close to Close · $43.10 · 5:03 P.m. ET
Quarterly Revenue ($ Billion)
33.82
Q3 25 · $33.8 B
36.38
Q4 25 · $36.4 B · QoQ + 7.6%
34.44
Q1 26 · $34.4 B · QoQ − 5.3%
34.25
Q2 26 · $34.3 B · QoQ − 0.5%
34.31
Q3 26 · $34.3 B · QoQ + 0.2% · YoY + 1.5%
- Q3 25
- Q4 25
- Q1 26
- Q2 26
- Q3 26
Q4 2026 Company Guidance
- Adjusted EPS (2026)5.04 – 5.06 $5.04 $5.06 $5.04 – 5.06 $
Midpoint 5.05 · Prior 4.99–5.04 · Market Expectation 5.020.6% Above Estimate ▲
- Postpaid Phone Net Adds (2026)1.1 – 1.2 million1.1 million1.2 million
Prior Upper Half of 0.75–1.0 MillionRaised 22.7% ▲
- Free Cash Flow Growth (2026)12%
Expected to Approach 12% · Prior 9–10%Raised 2.5 Points ▲
- Operating Cash Flow Growth (2026)3.5% – 5.0%3.5%5.0%
Prior 2.0–4.0%Raised 1.25 Points ▲
- Capital Expenditures (2026)16.0 – 16.5 billion16.0 billion16.5 billion16.0 – 16.5 billion
Includes AI Connect Investments · UnchangedFlat
How to Read the Chart
The blue band is the company's low-high range; its length shows how much room the company left itself. The black triangle and the line beneath it mark where the market expected, and the notch in the band is the range's midpoint. The triangle appears only where a market expectation is known. When the company gave a single number rather than a range and no market expectation is known, that row gets no band at all: there is no length to measure and no position to compare. Axis is ±20% around the midpoint.
Segment and KPI Data
Revenue by Segment
- Consumer$26.4 BShare 79.0%▲ 1.3% YoY
- Business$7.02 BShare 21.0%▲ 2.6% YoY
International wireline business held for sale
Key Metrics
Postpaid Phone Net Adds
406 K subscribers
Press Release
Postpaid Net Account Adds
137 K accounts
Press Release
Broadband Net Adds
314 K subscribers
Press Release
Postpaid Phone Churn
0.9%
Press Release
Total Broadband Connections
17.4 M connections
Press Release
Net Unsecured Debt
$124 B
Press Release
Shares are computed over the segment total: $33.5 B. The segment total differs from consolidated revenue ($34.3 B); the company's eliminations and other lines are not in this table. Source: Press Release.
Metrics come only from the company's own filings; each one names the document it was taken from.
“Our postpaid phone net additions were up 820% year-over-year to 406,000, our strongest Q3 in five years. Every new line we added delivered revenue. There were no free lines. We now expect our postpaid phone net adds for 2026 to be 1.1 million-1.2 million, more than three times last year's result.”
- Subscriber Growth Without Free Lines
- Lower Acquisition Costs
- AI Fiber Deals
Summary and Review
Summary
Verizon reported third-quarter revenue of $34.31 billion. That is up 1.5% from a year ago but 1.5% below the $34.85 billion market expectation. Adjusted earnings per share came in at $1.31, beating the $1.27 estimate by 3.1%. The midpoint of full-year earnings guidance is $5.05, just 0.6% above the $5.02 estimate. One gate is open and two are in line. Device sales, down 9% year over year, drove the revenue shortfall.
The stock closed at $43.10, down from Friday's close of $44.66. The intraday low was $42.47. The operating picture is strong: postpaid phone net additions reached 406,000, and the adjusted EBITDA margin hit 40.2%, the company's highest ever. The market did not read this report as a subscriber story. It read it as a revenue story. Verizon is deliberately cutting device subsidies. That choice expands margins but weighs on total revenue.
Score 62, verdict hold. Profit and cash are the quarter's strongest side. Free cash flow rose 12.1% year over year to $7.80 billion. Service revenue growth accelerated to 2.9%, and postpaid phone churn improved by 4 basis points. On the other hand, total revenue fell short of expectations. The raise in earnings guidance also lands close to what the market already expected. It is a good report card, but not a clean one, so the score stays below 70.
Full Review
Subscriber growth came without free lines.
Postpaid phone net additions totaled 406,000. That is more than 820% above the year-ago level and the best third quarter in five years. Postpaid net account additions were 137,000, which the company calls its best in over a decade. On the earnings call, CEO Dan Schulman stressed that every new line delivered revenue and no free lines were given. Postpaid phone churn fell to 0.94%. The year-over-year improvement was 4 basis points. Broadband added 314,000 net connections: 159,000 fixed wireless access and 155,000 fiber. Total broadband connections rose to 17.4 million. Growth also got cheaper. According to the earnings call, acquisition costs fell 41% and retention costs 30% year over year.
Why revenue fell short of expectations.
Total revenue was $34.31 billion. It grew 1.5% year over year but missed the market expectation by 1.5%. The gap came from devices, not services. Wireless equipment revenue fell to $5.12 billion, down 9.0%. The company attributes this to fewer upgrades and lower subsidies. Services, meanwhile, are accelerating. Mobility and broadband service revenue reached $23.5 billion, up 2.9%. That rate was 1.6% in the first quarter and 2.8% in the second. By segment, Consumer revenue rose 1.3% to $26.43 billion. Business revenue grew 2.6% to $7.02 billion. In short, low-margin device revenue is shrinking while high-margin service revenue grows. Headline revenue shows this shift with a lag. The device decline came in the same quarter as the jump in phone additions. That suggests subscribers can be won without handset promotions.
Margins and cash at record levels.
Adjusted EBITDA was $13.80 billion, up 8.0% year over year. The margin was 40.2%, compared with 37.8% a year ago. That is a 2.4-point expansion, and the company describes it as its highest margin ever. Free cash flow was $7.80 billion in the quarter, up 12.1%. The nine-month total reached $18.0 billion. Verizon returned $12.8 billion to shareholders over nine months. Of that, $8.8 billion was dividends and $4.0 billion was share buybacks. The full-year buyback target is up to $4.5 billion. Net unsecured debt stands at 2.3 times adjusted EBITDA. For how to read cash generation, see the cash flow guide. This quarter again showed the dividend comfortably covered by cash.
Guidance raised for the third time.
The company lifted its 2026 adjusted EPS guidance to $5.04-$5.06. The previous range was $4.99-$5.04. The $5.05 midpoint is 0.6% above the $5.02 market expectation. So the guidance gate counts as in line, not open. The postpaid phone net add target rose to 1.1-1.2 million. The previous target was the upper half of 750,000 to 1 million. Free cash flow growth is now expected to approach 12%, up from 9-10%. Capital spending stays at $16.0-$16.5 billion. The same day, Verizon announced a fiber infrastructure deal with Amazon Web Services worth more than $2 billion. According to the earnings call, such AI deals will start contributing to results in 2027. Operating cash flow growth guidance also moved up, from 2.0-4.0% to 3.5-5.0%.
One line to watch next quarter.
On earnings day, look at the mix of revenue rather than the headline; the earnings day guide explains this distinction. For Verizon, watch one line next quarter: mobility and broadband service revenue growth. The company guides to about 4% for the fourth quarter. This quarter's rate was 2.9%. If growth reaches 4%, the device decline stops mattering and the story holds. If it stays below 3%, subscriber gains are not turning into revenue. In that case, this quarter's addition record would read as growth that did not reach the top line. The second line to check is churn. Postpaid phone churn staying below 0.94% would show that the low-subsidy strategy is not driving customers away. A move above it would put the strategy back in question.
Looking Ahead
Strengths and Risks
5 Strengths · 4 RisksStrengths
5- Postpaid phone net additions rose to 406,000, up more than 820% year over year.
- The adjusted EBITDA margin reached 40.2%, the company's highest level ever.
- Quarterly free cash flow grew 12.1% year over year to $7.80 billion.
- Service revenue growth accelerated from 1.6% to 2.9% over three quarters.
- Verizon signed a fiber infrastructure deal with Amazon Web Services worth more than $2 billion.
Risks
4- Total revenue came in 1.5% below the market expectation.
- Wireless equipment revenue fell 9.0% year over year and is weighing on headline growth.
- Full-year earnings guidance is only 0.6% above the market expectation.
- Total unsecured debt is $136.1 billion, and high leverage keeps interest expense significant.
What to Watch
4- Fourth-quarter results are expected in January 2027, with service revenue growth guided to about 4%.
- The company aims to extend fiber to more than 32 million homes by year-end.
- Full-year share buybacks of up to $4.5 billion are expected to be completed.
- AI infrastructure deals are expected to start contributing to revenue in 2027.
Upcoming Earnings
To Understand This