Verizon Tops Q3 Profit and Phone-Subscriber Estimates, Raises 2026 Outlook and Signs $2B+ AWS Fiber Deal as Revenue Misses

VZ reported third-quarter adjusted earnings of $1.31 per share on Monday, up 8.3% from a year earlier and ahead of the Zacks consensus of $1.27. The bigger surprise was subscribers: Verizon added 406,000 postpaid phone customers, nearly double the Visible Alpha estimate of 209,439. On the call, management split that into 266,000 consumer additions, helped by the Simplicity plans launched in June, and 140,000 in business mobility. Total operating revenue rose 1.5% to $34.3 billion but missed the $34.74 billion LSEG consensus, because wireless equipment revenue fell 9.0% as fewer customers upgraded their phones.

Verizon raised its full-year 2026 guidance for the third quarter in a row. It now expects 1.1 million to 1.2 million postpaid phone net additions, up from the upper half of 750,000 to 1.0 million, and adjusted EPS of $5.04 to $5.06, up from $4.99 to $5.04. Free cash flow growth is now expected to approach 12%, up from 9% to 10%, while capital spending guidance of $16.0 billion to $16.5 billion was left unchanged. Adjusted EBITDA reached a record $13.8 billion at a 40.2% margin. Mobility and broadband service revenue grew 2.9% to about $23.5 billion and is forecast to grow about 4.0% in the fourth quarter, and management said wireless service revenue, just over $20.9 billion in the quarter, should return to year-over-year growth in the fourth quarter.

The AWS agreement, valued at more than $2 billion, has Verizon providing high-capacity fiber connectivity between Amazon's data centers for AI workloads, which makes Amazon the customer. Together with a more than $1 billion dark-fiber deal with Google announced in July, Verizon said it now has about $4 billion of signed AI Connect contracts, though it does not expect that revenue to show up in results until 2027.

The market weighed the strong subscriber and cash-flow numbers against the top-line miss: early reports of a premarket gain gave way to losses once trading began, and VZ traded about 3.9% lower at $42.94 in early afternoon. Two things to watch from here are whether the fourth-quarter service revenue acceleration arrives on schedule, and how much of the subscriber surge holds up as Verizon keeps cutting device subsidies, which lowers upgrade volumes and equipment revenue.