Verizon Communications (NYSE:VZ) reported stronger third-quarter operating and financial results, citing growth in postpaid wireless accounts, lower customer-acquisition costs, accelerating service-revenue growth and rising free cash flow. The company raised several elements of its 2026 outlook and said it expects momentum to continue into 2027.
Chief Executive Officer Dan Schulman said Verizon added 406,000 postpaid phone customers during the quarter, up 820% from a year earlier and representing its strongest third-quarter phone-add result in five years. The company also recorded 137,000 postpaid net account additions, its best quarterly account growth in more than a decade.
Schulman emphasized that the company did not rely on free lines to generate growth. “Every new line we added delivered revenue,” he said. Verizon now expects 2026 postpaid phone net additions of 1.1 million to 1.2 million, more than three times the prior year’s result, according to management.
Customer Growth and Lower Promotional Spending
Verizon said postpaid phone churn improved during the quarter. Overall postpaid phone churn was 0.94%, down four basis points year over year, while consumer postpaid phone churn was 0.87%, also down four basis points.
The company attributed part of its performance to its Simplicity plan, Verizon One offering and loyalty program. CFO Tony Skiadas said Simplicity helped produce 266,000 consumer postpaid phone net additions, Verizon’s best third-quarter consumer performance in five years. Business mobility added 140,000 net customers, while the company said it returned to public-sector growth.
Promotional spending also declined. Verizon said acquisition costs fell 41% year over year and retention costs fell 30%. Skiadas said upgrade volumes dropped more than 20% from the prior-year quarter, contributing to lower equipment revenue but also reducing subsidies and supporting profitability.
Schulman said Verizon sees potential to raise prices selectively if it adds value for customers, rather than implementing price increases without corresponding benefits. He said the company believes it can continue improving churn as its customer proposition and network performance improve.
Broadband Strategy Shifts Toward Fiber and Higher-Speed FWA
Verizon reported 314,000 broadband net additions in the third quarter and said fiber accounted for nearly half of those additions. The company has added more than 1 million broadband customers year to date and ended the period with 17.4 million broadband subscribers, Schulman said.
Management said it is shifting toward a more segmented fixed wireless access, or FWA, strategy. Schulman said Verizon will avoid selling FWA service to customers whose speed requirements cannot be met by the available network capacity.
To expand higher-speed coverage, Verizon plans to use its millimeter-wave spectrum to offer 1-gigabit FWA service in metropolitan areas. The company expects to begin scaling the offering in the fourth quarter and through 2027 and beyond. Over the medium term, Verizon aims to add coverage for 10 million to 15 million premises with 1-gig speeds through FWA, on top of its planned 40 million to 50 million fiber passings.
Verizon continues to expect fiber passings to exceed 32 million by year-end. Schulman said more than 55% of new fiber broadband customers selected download speeds of 1 gigabit or more during the third quarter, supporting higher average revenue per user and customer satisfaction.
Revenue, Profitability and Cash Flow
Total third-quarter revenue was $34.3 billion, up 1.5% from a year earlier. Mobility and broadband service revenue grew 2.9%, compared with 2.8% in the second quarter and 1.6% in the first quarter. Verizon expects mobility and broadband service revenue growth to reach the upper half of its 2.5% to 3% full-year guidance range, with fourth-quarter growth expected to be approximately 4%.
Wireless service revenue totaled just over $20.9 billion. Verizon said it expects to return to year-over-year wireless service revenue growth in the fourth quarter. Equipment revenue declined 9%, reflecting lower upgrade activity.
- Adjusted EBITDA rose 8% year over year to $13.8 billion.
- Adjusted EBITDA margin expanded 240 basis points to 40.2%, which Skiadas described as Verizon’s highest reported margin.
- Adjusted earnings per share increased 8.3% to $1.31.
- Third-quarter free cash flow totaled $7.8 billion, up more than 12% year over year.
- Free cash flow for the first nine months was $18 billion, up 14.3%.
Verizon raised its full-year adjusted EPS growth outlook to 7% to 7.5%, from 6% to 7%, and increased its free-cash-flow growth outlook to approximately 12%, from 9% to 10%. The company maintained its 2026 capital-expenditure outlook of $16 billion to $16.5 billion, including success-based AI Connect spending.
AI Connectivity and Capital Allocation
Verizon announced a dark-fiber agreement with Amazon Web Services valued at more than $2 billion. Together with an agreement with Google announced in the prior quarter, Schulman said the company has approximately $4 billion in signed AI Connect contracts. Verizon said the business includes dark fiber, lit fiber and edge-computing opportunities for hyperscalers, neocloud providers and enterprise clients.
Management expects AI Connect revenue to begin affecting results in 2027 and said the contracts carry attractive margins. Schulman said incremental capital spending tied to the agreements is modest, success-based and linked to defined contracts. Verizon also cited a multiyear agreement with Corning for more than 80 million miles of fiber through 2032.
The company said its $9 billion OpEx and CapEx cost-reduction program remains on track, while Frontier integration is expected to generate more than $1 billion in run-rate operating-cost synergies by 2028.
Verizon’s net unsecured debt-to-consolidated adjusted EBITDA ratio improved to 2.3 times at quarter-end, down 0.2 times sequentially. The company said it remains on track to reach its target leverage range during 2027. Through the first nine months, Verizon returned $12.8 billion to shareholders, including $8.8 billion in dividends and $4 billion in share repurchases, and continues to expect up to $4.5 billion in full-year buybacks.
About Verizon Communications (NYSE:VZ)
Verizon Communications Inc is a telecommunications company that provides wireless communications, broadband, and digital connectivity services. Through its consumer business, Verizon offers mobile voice and data plans, smartphones and other connected devices, home internet, fixed wireless access, and fiber-optic broadband services under the Fios brand.
Verizon also serves businesses, government agencies, and other organizations with wireless connectivity, private networks, internet and data services, managed communications, cloud and security solutions, and Internet of Things services.
