Verizon Communications Inc.

(New York Stock Exchange)
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Bullish +55

Verizon (VZ) Latest Earnings | What Happened to the Telecom Company That Is Growing Profits Despite Poor Smartphone Sales (July-September/Q3, 2026)

Dividend Earnings report AI-generated analysis

πŸ“ˆ Verizon reported Q3 2026 adjusted EPS of $1.31, an 8.3% increase year-over-year, exceeding analyst expectations.

πŸ“‰ Total revenue grew modestly by 1.5% to $34.3 billion, missing market forecasts due to a 9% decline in device sales.

πŸ“± Mobile subscriber additions surged to 406,000 net new users, the highest quarterly total in five years.

πŸ’° Free cash flow for the first nine months of 2026 reached $18 billion, up 14.3% from the prior year.

πŸš€ CEO Dan Schulman raised full-year revenue and profit guidance for the third consecutive quarter without increasing capex.

🏠 FWA (5G Home Broadband) revenue grew 8.0% to $13.8 billion, contributing significantly to overall growth.

πŸ’Έ The company plans up to $4.5 billion in share buybacks for the full year alongside its quarterly dividend.

πŸ“‰ Device upgrade rate declined to 2.6% from 3.3% last year as customers trade in older devices less frequently.

🏦 Net unsecured debt stood at $123.7 billion after accounting for cash on hand, with interest expense of $5.875 billion for the first nine months.

πŸ” Revenue from Mobility & Broadband Services grew 6.7% to $8.65 billion, driven by service fees rather than hardware.

Bullish Signals
  • Adjusted EPS rose 8.3% to $1.31, significantly beating the consensus forecast of $1.27.
  • Net mobile subscriber additions accelerated to 406,000 in Q3, the highest level for the quarter in five years.
  • Free cash flow increased 14.3% year-over-year to $18 billion for the first nine months of fiscal 2026.
  • CEO Dan Schulman raised full-year revenue and profit guidance for the third consecutive quarter without increasing capital expenditures.
  • EBITDA margin expanded to 40.2%, up from 37.8% in the prior year, indicating improved operational leverage.
  • Postpaid account additions reached 137,000, marking the highest quarterly total in over a decade.
  • The company successfully acquired Frontier Communications and integrated its fiber-optic network to expand FWA revenue.
Risk Factors
  • Total revenue of $34.3 billion missed market expectations of approximately $34.8 billion due to weak device sales.
  • Device sales declined by 9.0% year-over-year, reducing the company's hardware revenue stream.
  • The device upgrade rate fell to 2.6% from 3.3% in the prior year, suggesting slower consumer replacement cycles.
  • Total debt stands at $166.2 billion, with net unsecured debt of $123.7 billion after cash deductions.
Full Analysis
Verizon Communications reported third-quarter fiscal year 2026 earnings on October 26, 2026, driven by a strategic shift toward high-margin services despite a decline in hardware sales. Total revenue increased by 1.5% year-over-year to $34.3 billion, while adjusted earnings per share rose 8.3% to $1.31 and adjusted EBITDA grew 8.0%. This performance highlights the company's ability to generate core profitability through service fees rather than device sales. The telecommunications giant added a significant 406,000 net mobile subscribers in the quarter, marking the highest growth rate for Q3 in five years and nearly ten times the pace of the prior year. Postpaid account additions reached 137,000, the highest level in over a decade, indicating strong customer retention and demand for its connectivity services. The company's EBITDA margin expanded to 40.2%, reflecting improved operational efficiency. Cash flow generation remains robust with free cash flow for the first nine months of the year reaching $18 billion, a 14.3% increase from the previous year. CEO Dan Schulman has successfully raised full-year guidance for the third consecutive quarter without increasing capital expenditures, projecting revenue growth approaching 12%. The company also maintained its dividend outlook while planning share buybacks of up to $4.5 billion for the full year.