Verizon raises 2026 outlook after strong postpaid subscriber growth, strikes $2B AWS AI deal

Verizon Communications (VZ) reported third-quarter revenue and adjusted earnings below analysts’ estimates on Monday, even as stronger subscriber additions and higher margins helped the telecom company lift its full-year 2026 guidance for a third consecutive quarter.

The company reported adjusted earnings of $1.31 per share, below the consensus estimate of $1.27, while revenue rose 1.5% year over year to $34.31 billion, missing expectations of $34.85 billion.

Net income increased 5.2% to $5.3 billion, while adjusted earnings before interest, taxes, depreciation, and amortization rose 8% to a record $13.8 billion. Its adjusted EBITDA margin expanded to 40.2% from 37.8% a year earlier.

Verizon (VZ) added 406,000 postpaid phone subscribers in the quarter, its strongest third-quarter performance in five years, and 137,000 postpaid net accounts, its best quarterly result in more than a decade. Postpaid phone churn improved four basis points to 0.94%.

The company raised its full-year adjusted EPS forecast to $5.05 at the midpoint, implying growth of 7.25% year over year, and increased its postpaid phone net additions target to 1.15 million, from 875,000 at the midpoint of its previous 750,000-1 million range. It also expects free cash flow growth of 11.5% to 12%, compared with its previous forecast of 9% to 10%.

Verizon (VZ) said mobility and broadband service revenue grew 2.9% to $23.5 billion, with growth expected to accelerate to about 4% in the fourth quarter. Total revenue growth was partly offset by a 9% decline in wireless equipment revenue, reflecting lower device-upgrade volumes and reduced spending on subsidies.

Separately, Verizon (VZ) signed an agreement worth more than $2 billion with Amazon Web Services (AMZN) to expand distributed computing infrastructure for artificial intelligence workloads.

Shares were marginally higher, up about 0.2% in the premarket trading. Verizon (VZ) has gained about 9.7% year-to-date, compared with about an 11.4% rise in the broader market index during the same period. Short interest on VZ stands at 2.14% of the total float.