Key Highlights

  • Verizon Communications (NYSE:VZ) reported third quarter 2026 adjusted EPS of USD 1.31 on October 26, 2026, against a USD 1.27 consensus estimate, a 2.8% surprise in published market data.
  • Operating revenue was USD 34.3 billion, up 1.5%, while adjusted EBITDA rose 8.0% to USD 13.8 billion and the margin widened from 37.8% to 40.2%, according to the company release.
  • Verizon Communications (NYSE:VZ) added 406,000 postpaid phone customers, more than 820% above a year earlier, and lowered postpaid phone churn by 4 basis points to 0.94%.
  • Management lifted 2026 adjusted EPS guidance to USD 5.04 to 5.06 and now expects free cash flow growth to approach 12.0%, the third raise in three quarters.

What Verizon Reported

Verizon posted adjusted EPS of USD 1.31 against GAAP EPS of USD 1.25, which was up 6.8% from USD 1.17. Free cash flow was USD 7.8 billion, up 12.1%. Broadband added 314,000 lines, made up of 159,000 fixed wireless and 155,000 fiber connections. Chief Executive Dan Schulman called it another record-breaking quarter and said Verizon is only one year into a multi-year growth story. The beat is modest in size, so the larger signal is the subscriber turnaround: a year earlier additions were under a tenth of this quarter's level, simple arithmetic from the stated 820% increase, and service revenue growth held. Management framed the performance as the product of operational efficiency rather than price increases alone.

Why Customers Stayed

The release credits a customer-first strategy built on its Simplicity offers and an expanded loyalty program, rather than heavy device subsidies. The mechanism matters: lower subsidies cut equipment revenue, which fell 9.0%, but they also reduce handset costs and lift margin, while lower churn keeps high-value subscribers paying service fees for longer. Verizon also signed an agreement worth USD 2.0 billion plus with AWS to scale distributed compute for AI workloads, using its fiber and network assets. That deal turns infrastructure into a second revenue line, although the timing of revenue recognition was not given in the release. The 155,000 fiber additions give that effort a base.

Guidance, Capital and Risks

For 2026 Verizon now expects 1.1 to 1.2 million postpaid phone net additions, up from the upper half of 750,000 to 1.0 million, and cash flow from operations growth of 3.5% to 5.0%. Capital expenditure is unchanged at USD 16.0 to 16.5 billion. Mobility and broadband service revenue growth is guided to the upper half of 2.5% to 3.0%, with about 4.0% expected in the fourth quarter. Risks include a competitive wireless market, falling equipment revenue and the cost of sustaining loyalty offers. Investors should watch whether churn stays near 0.94% once promotional comparisons toughen. Because guidance has been raised three times in a row, expectations are now higher, and any slip in subscriber additions in the fourth quarter could draw a sharper reaction than a beat would.

Where Things Stand

Verizon added 406,000 postpaid phone customers because lower churn, loyalty offers and simpler plans kept existing subscribers while attracting new ones, and the release also showed wider margins. That answers the headline, with a caveat: the EPS beat was small and equipment revenue declined. Verizon Communications (NYSE:VZ) raised 2026 guidance for the third quarter running, which signals confidence, but sustaining churn near 0.94% and covering a USD 16.0 to 16.5 billion capital plan will decide whether the turnaround lasts.