Verizon Q3 2026 Earnings Brief

Executive Summary

1. Q3 2026 Scorecard

Verizon raised full-year guidance for the third consecutive quarter. Management said the quarter combined record account growth with its lowest cost to acquire and retain customers in more than three years. Promotional cost of acquisition fell 41% and cost of retention fell 30% year over year. Every new line came with revenue. Verizon said there were "no free lines."

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2. Wireless: Lines, Accounts & Churn

Line and account growth

• Postpaid phone net adds: 406K, up from 44K (+820% YoY) and the strongest Q3 in five years. Schulman said the Board questioned whether the figure was a typo. Year to date, postpaid phone net adds are almost 900K better than the same period of 2025.
• Consumer postpaid phone net adds: 266K, the best third quarter in five years. Verizon credits the Simplicity plan launched mid-June. Business mobility: 140K net adds, with strong enterprise and small-business demand. The public sector returned to growth.
• Postpaid net account adds: 137K (+313K YoY), the best quarterly account performance in over a decade. Verizon expects positive account growth in Q4 as well.
• Gross adds rose 11%, driven by customers new to Verizon. Gains were strong in segments where it has historically under-indexed, such as single-line and two-line accounts.
• Total postpaid net adds: 231K. Wireless retail net adds: 166K. Core prepaid: −12K (prepaid phone −52K).
• Connections at 30 Sep 2026: 147.1M wireless retail (+0.7%), including 126.8M postpaid. Postpaid phones were 94.5M (+1.4%) and core prepaid 19.3M (+1.4%). Postpaid accounts: 34.47M.

Customer economics

• Postpaid phone churn 0.94% (−4 bps YoY). Consumer postpaid phone churn 0.87% (−4 bps). In 2025, churn rose every quarter. Core prepaid churn was 3.80% (3.73% a year ago).
• Postpaid ARPA $168.08, −1.9% YoY but up sequentially from $167.93 in 2Q26. Core prepaid ARPU $33.51 (+2.5%). Verizon says Simplicity is ARPA-accretive for the segment it targets.
• Cost of acquisition −41% and cost of retention −30% YoY. This is the second straight quarter of lower retention cost. Net equipment subsidy was the lowest in two years.
• Customer value proposition (launched mid-June): Simplicity (subsidy-free, flexible, transparent), Verizon One and a loyalty programme. Verizon says NPS, overall satisfaction and first-call resolution are improving on every dimension it tracks.
• Loyalty programme enrolment is scaling quickly across the base.
• Lower upgrades pushed wireless equipment revenue down 9.0% to $5.1B. Wireless service revenue was just over $20.9B. Verizon expects it to return to YoY growth in Q4.

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3. Broadband: Fiber, FWA & Convergence

• 314K broadband net adds (−2.5% YoY): 155K fiber (vs 61K) and 159K FWA (vs 261K, −39.1%). Verizon has added over 1M broadband customers year to date. Across mobility and broadband, it has added nearly 1.7M subscribers in the first nine months.
• Deliberate FWA segmentation: starting earlier in the quarter, Verizon stopped selling FWA where it can't deliver the speed a customer segment expects. Schulman's example: if a customer needs 1 Gbps and only 300 Mbps is available, Verizon won't sell the service.
• Base: 17.4M broadband connections (+33.5%), of which 11.07M are fiber and 6.37M FWA. Broadband ARPU rose YoY. Verizon reports "no discernible impact" from alternative providers.
• Over 55% of new fiber customers take 1 Gbps or faster, which adds ARPA and improves satisfaction. Verizon also simplified fiber pricing and wants to compete more on its value proposition and less on promotions.
• Convergence: postpaid phone customers are taking broadband, and broadband customers are taking postpaid phone. Both cohorts churn materially less than single-product customers. Schulman expects most of the base to be fully bundled within 3–5 years.
• FWA target: Verizon reaffirmed 8–9M FWA subscribers by 2028. With high-speed FWA it expects to go "well beyond" that. It is also scaling an MDU programme that delivers fiber-like speeds over FWA.
• Frontier: the integration is ahead of plan and on track for over $1B in run-rate operating cost synergies by 2028.

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4. Network & Spectrum: The mmWave 1-Gig Breakthrough

What Verizon announced

• Spectrum asset: 1,700 MHz of mmWave, which Verizon says is 2x any competitor. Much of it was previously underutilised.
• Status: the product has been trialled and is now having operational success. Verizon starts scaling in Q4 2026, then market by market through 2027 and beyond.
• Footprint: it adds 10–15M premises with gig speed via FWA, on top of 40–50M fiber passings. That gives a 50–65M premises target with ≥1 Gbps download over the medium term.
• Network efficiency: moving traffic to mmWave offloads C-band capacity, adds capacity and runway across the network, and "significantly alters" Verizon's spectrum positioning.
• Cost: much more cost-efficient than rolling out fiber, with no right-of-way, no digging and no permitting.
• Growth: Verizon expects broadband net adds to pick up through 2027 and beyond, on both fiber and a revamped high-speed FWA service.

Spectrum, fiber and network modernisation

• AWS-3 (FCC Auction 113): spectrum won in the auction is already improving network performance for customers. Further deployment will boost capability in key metros.
• Wireless licences: the cash flow statement shows $4.38B of wireless licence acquisitions in 9M 2026 (vs $0.34B in 9M 2025). Wireless licences on the balance sheet were $161.4B at 30 Sep 2026 (+$4.4B vs year-end 2025).
• Upper C-band: Schulman expects the auction (160 MHz) in the first half of 2027. He noted it will take 4–5 years to clear and needs different equipment. Verizon has not decided whether it will bid, given its new spectrum position. It weighs build vs buy and densification, and points to "a robust pipeline" of spectrum auctions beyond 2027.
• Fiber build: >32M fiber passings expected by year-end 2026. The 40–50M medium-term target is on track.
• Corning supply deal (announced “last month,” per the October 26 call): a multi-year, multi-billion-dollar agreement for more than 80M miles of fiber through 2032. It supports both fiber-broadband expansion and the long-haul backbone that AI hyperscalers need.
• Modernisation: Verizon reported progress on network modernisation and copper decommissioning as part of its cost programme. In Q2 2026 it recorded asset rationalisation charges for ceasing use of certain real estate and network assets.
• Network performance & AI: Verizon is running its transformation through a newly completed AI tech stack, including applications to raise network performance and to fix issues before customers notice them.
• Next generations: Verizon is "already experimenting with what 6G applications will look like." Schulman expects the network to be "two to three generations better" in 4–5 years, with gig-plus coverage across the US via mmWave.
• Portfolio: Verizon's international wireline connectivity and managed network services business was classified as held for sale in Q2 2026 and moved from Business to Corporate & other. That produced a $746M loss on disposition in Q2.

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5. AI Connect: Fiber & Edge for Hyperscalers

• Amazon Web Services: a dark-fiber agreement worth over $2B, announced on results day. Verizon describes it as a landmark AI infrastructure deal that expands its strategic partnership with AWS. It builds on the Google agreement announced last quarter, where Verizon is already processing fiber orders.
• Signed contracts: about $4B, including hundreds of millions of dollars from edge-computing locations. Management says the first long-term edge contracts should generate hundreds of millions in revenue over their term.
• Pipeline: further hyperscalers, neocloud providers and large enterprises are negotiating for dark or lit fiber. Several partners are moving to use Verizon network hubs for AI inference edge computing, and some deals are already signed.
• Why Verizon: management points to the shift toward distributed inference (from GPUs toward CPUs) driven by AI agents. Verizon's edge sites and fiber are scarce assets "exactly in the right place." It cites fiber capability, existing real estate, service performance and balance sheet.
• Economics: deals are customer-specific and long in duration, with high-quality counterparties and attractive margins. Revenue starts in 2027. There is no change to the 2026 capex envelope, and the 2026 guide includes success-based AI Connect capital. Expect modest, success-based capex in 2027 tied to defined contracts.
• Next step: Verizon will explain how AI Connect contributes to 2027 growth on its next earnings call.

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6. Financial Performance

Income statement highlights (3Q26 vs 3Q25)

9M 2026: revenue $103.0B (+1.2%), operating income $24.1B (−0.8%), net income $14.4B (−4.9%), diluted EPS $3.37 (−4.0%). 9M 2026 includes Q2 2026 special items (severance $397M, asset rationalisation $258M, $746M loss on disposition) and 1Q26 acquisition & integration charges of $261M. 9M interest expense was $5.88B (+19.0%). Q3 adjusted-EPS adjustments: acquisition-related intangible amortisation $289M pre-tax ($0.05/share) and acquisition & integration charges $57M ($0.01/share).

• Service revenue drivers: mobility & broadband service revenue growth has accelerated each quarter of 2026 (1.6% in Q1, 2.8% in Q2, 2.9% in Q3). Verizon credits scaling volumes and moderating headwinds from promotional amortisation.
• Consumer: revenue was $26.43B (+1.3%), and mobility & broadband service revenue was $19.78B (+3.6%). Segment EBITDA was $11.97B (+6.5%) at a 45.3% margin, up from 43.0%. 9M segment EBITDA was $35.23B (+5.4%) at a 44.5% margin.
• Business: revenue was $7.02B (+2.6%). Mobility & broadband service revenue was $3.71B (−0.8%), and "Other" (wireline) revenue was $2.47B (+10.0%). Segment EBITDA was $1.94B (+13.0%) at a 27.6% margin, up from 25.1%. 9M segment EBITDA was $6.03B (+16.5%) at a 28.3% margin.
• Reporting note: since 1Q26, Verizon reports segment revenue as mobility & broadband service, wireless equipment and other, and prior periods are recast. The international wireline business was moved to Corporate & other in Q2 2026.

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7. Cash Flow, Capex, Spectrum & Balance Sheet

• FCF: 9M FCF of $18.0B (+14.3%) is, Verizon expects, an industry-leading result.
• Capex was $11.9B through 9M, on track for the full-year guide of $16.0–16.5B, including success-based AI Connect capital. Operating cash flow was $29.9B (+$1.9B, nearly 7%), helped by working-capital gains from cost work and lower upgrades.
• Debt: total debt was $166.2B, unsecured debt $136.1B and net unsecured debt $123.7B. Cash was $4.5B, down from $19.0B at year-end 2025. 9M 2026 cash paid for acquisitions of businesses was $9.48B. Secured debt was $30.1B. The equity credit for junior subordinated notes was $7.9B.
• Balance sheet: total assets were $415.5B. Net PP&E was $125.1B (+$15.7B vs year-end 2025) and goodwill $30.7B (+$7.9B).
• Shareholder returns: $12.8B returned YTD (+49%): $8.8B in dividends and $4.0B in buybacks. Verizon expects up to $4.5B of repurchases for 2026. The quarterly dividend is $0.7075. Shares outstanding were 4,145M.
• Capital allocation priorities (unchanged): invest in the business, grow the dividend, pay down debt toward the target leverage range, then return capital via buybacks.
• Workforce: 93.3K full-time-equivalent employees, vs 100.2K at 30 Sep 2025, 89.9K at 31 Dec 2025 and 99.6K at 31 Mar 2026.

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8. 2026 Guidance & Outlook

Source: Verizon 3Q 2026 earnings presentation. Guidance includes Frontier from January 20, 2026. FCF forecast is $22.44–22.54B (previously $21.94–22.14B). The operating cash flow forecast is $38.44–39.04B, or 3.5%–5.1% growth.

Near-term and 2027 signals

• Q4 2026: mobility & broadband service revenue growth of about 4%, wireless service revenue growing YoY, positive account growth, and continued lower upgrades. The 2026 postpaid phone outlook is more than 3x 2025's result.
• 2027 tailwinds Verizon named: the full multi-year benefit of the $9B cost programme, further scaling of the new consumer value proposition, AI Connect revenue, and additional capacity for dividends and buybacks. Verizon also expects broadband to pick up through 2027 on fiber and the revamped high-speed FWA service. Leverage should reach its target range in the 2027 timeframe ("early next year," per Schulman).
• Full 2027 outlook will come with Q4 2026 results.

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9. Competition: SpaceX/Starlink, Satellite & Pricing

Citi asked about a possible LEO/Starlink entry into core mobile. Schulman gave the call's most detailed competitive answer:

• Operating assumption: "everything SpaceX says they will do, they will do," and execute flawlessly.
• Terrestrial is required: without a terrestrial network, satellite broadband's addressable market is "relatively small" and mostly very rural. In suburban and urban areas, where most of Verizon's revenue sits, Verizon says terrestrial networks are 100–1,000x more efficient. Wireless is harder still for satellite, and the physics worsen at higher broadband speeds.
• What a SpaceX build would need: 65K–80K macro sites, backhaul (fiber plus some satellite), RAN, large amounts of spectrum, retail, customer service and back-office systems. That means at least 4–6 years and an estimated $300B–$0.5T. Schulman said the result would have the same cost structure as incumbents and would make SpaceX the sixth competitor, not the fourth.
• Market intelligence: Verizon says it knows SpaceX's RFIs and its tower and equipment conversations.
• MVNO stance: "there are no back doors to any of our MVNO agreements." Schulman sees no benefit in extending an MVNO deal to any satellite provider and rejects the "prisoner's dilemma" framing.
• Room to cooperate: satellite has a role in remote areas. Verizon could work with satellite providers directly or through its JV on a complementary service.
• Upper C-band: even if SpaceX wins spectrum in the 2027 auction, Verizon notes it could not deploy it for 4–5 years.
• Current competition: "two of our competitors… offer free wireless service." Verizon says it is holding share and beginning to gain share without competing on free lines, free phones or subsidies. Schulman said Verizon can respond to a competitive launch within two hours.
• Pricing: after adding "a tremendous amount of value," Verizon sees potential room to adjust the price-to-value equation, including by raising prices.

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10. Agentic AI & the Network

• Traffic thesis: Schulman envisions "at least 100 billion agents" in a world of about 8.5B people. He expects an explosion in data traffic that makes the network "a scarce and crucial asset" which Verizon "will price it as such." He expects different pricing plans.
• Differentiation: Verizon plans to use its national fiber backbone as a competitive differentiator, alongside a trusted, secure environment against fraud.
• Agent access controls: Verizon will not let agents onto its platforms unless it is certain they act for a real customer, and that the agent's purchases match the permissions the customer has given.
• Agentic commerce: Verizon sees agents selling converged bundles and subscriptions. Customers could also use "Verizon dollars" from the new loyalty structure through agents.
• Internal AI: Verizon uses AI to fix issues before customers notice them, to improve network operations and customer service, and to cut costs.
• Schulman said AGI may be one to three years away, depending on who you ask, with quantum and robotics to follow.

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11. Transformation & Cost Programme

• 10 transformation work streams launched earlier in 2026 are delivering results earlier than expected.
• Cost levers named: network modernisation, copper decommissioning, and advertising & marketing spend. Verizon expects further efficiency gains in 2027.
• Schulman framed the business as "a multivariable equation": net adds, cost to acquire, churn and revenue together, rather than chasing one metric.

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12. NextGComm Analysis: What It Means for Operators

The analysis below is NextGComm's view. The rest of this briefing reports company disclosures.

1. mmWave gets a second life as fixed access

Verizon describes its 1,700 MHz of mmWave as "largely underutilized" until now. It is reframing it as a gigabit fixed-access layer that it says is much more cost-efficient to deploy than fiber and that offloads C-band. Operators holding idle high-band spectrum should revisit its fixed-wireless economics, especially in dense metros and MDUs.

2. Segmented FWA beats volume-led FWA

FWA net adds fell to 159K from 261K in the quarter Verizon began refusing to sell FWA below a segment's expected speed. Broadband ARPU still rose YoY and fiber was nearly half of adds. Operators should treat sector capacity and the speed promised to each segment as a sales gate, not an afterthought.

3. Fiber becomes AI infrastructure revenue

About $4B of signed AI Connect contracts (fiber and edge), including AWS and Google, shows a new monetisation path for long-haul and metro fiber. Operators with route diversity, central offices and edge real estate should package them for hyperscalers and neoclouds. Securing fiber supply, as Verizon did with Corning, is now a strategic step.

4. Satellite: compete on the terrestrial moat

Verizon's position is clear: no MVNO access for satellite entrants, cooperation only for remote coverage, and a bet that a terrestrial build takes years. Operators should protect wholesale terms, accelerate convergence (bundled customers churn less) and be ready for upper C-band dynamics in 2027.

Watch-list for Q4 2026

• Pace and markets of the mmWave 1-Gig FWA launch, and early take-up
• Whether FWA net adds re-accelerate once high-speed FWA is on sale
• New AI Connect signings beyond the ~$4B already signed
• Any targeted price increases
• Upper C-band auction participation
• 2027 guidance, including AI Connect revenue and capex

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13. Data Gaps

• The Q3 materials do not give the Google agreement value or the term lengths of the AWS and edge contracts.
• The materials give no pricing, launch markets or device/CPE details for the mmWave 1-Gig FWA product, and no capex estimate per premise.
• No broadband ARPU figure is given, only the direction (up YoY).
• No split of capex between wireless, fiber and AI Connect.
• No year-end FWA subscriber guide beyond the reaffirmed 8–9M by 2028.

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14. Sources

• Verizon Communications, 3Q 2026 Financial & Operating Information, as of September 30, 2026
• Verizon Communications, 3Q 2026 Condensed Consolidated Financial Statements
• Verizon Communications, 3Q 2026 Non-GAAP Reconciliations
• Verizon Communications, 3Q 2026 earnings presentation and results infographic, October 26, 2026
• Verizon 3Q 2026 earnings call (LSEG StreetEvents edited transcript), October 26, 2026. Speakers: Dan Schulman (CEO), Tony Skiadas (CFO), Colleen Ostrowski (SVP, Treasurer & Head of IR). Analysts: UBS, Goldman Sachs, Citi, Morgan Stanley, TD Cowen.

Adjusted EBITDA, adjusted EPS, free cash flow, segment EBITDA and net unsecured debt are non-GAAP measures. See Verizon's reconciliations at verizon.com/about/investors. Forward-looking statements are subject to the risks Verizon describes in its SEC filings. This briefing is for information only and is not investment advice.