Key Highlights
- Shares of Verizon declined 3.15% to close at $43.25 despite reporting solid third-quarter results.
- The telecom giant delivered $34.3 billion in total quarterly revenue with service revenue growing 2.9%.
- Postpaid phone customer additions jumped to 406,000, representing an 820% increase from the prior year.
- The company lifted its full-year 2026 adjusted earnings per share outlook to a range of $5.04 to $5.06.
- A major cloud computing partnership with AWS valued above $2 billion was announced to support AI infrastructure.
Shares of Verizon closed down 3.15% at $43.25 on Thursday, erasing earlier session gains despite the company reporting improved quarterly performance and lifting its full-year outlook for the third consecutive quarter. The $1.41 per-share decline came as the telecommunications company announced third-quarter 2026 revenue of $34.3 billion alongside accelerating subscriber momentum.
Verizon Communications Inc., VZ
Subscriber Growth Reaches Five-Year High as Verizon Stock Retreats
Verizon reported adding 406,000 postpaid phone subscribers during the third quarter, representing its best third-quarter performance in five years and an 820% surge compared to the year-ago period. Despite this substantial improvement in customer acquisition, the stock experienced selling pressure throughout the trading session.
Postpaid account additions totaled 137,000 for the quarter, delivering the company’s strongest performance in more than ten years. Churn metrics also showed improvement, with overall postpaid phone churn declining by four basis points to 0.94% and consumer churn falling to 0.87%. The company simultaneously reduced promotional acquisition spending by 41%, demonstrating improved efficiency in customer acquisition strategies.
The broadband segment contributed 314,000 net additions, split between 159,000 fixed wireless customers and 155,000 fiber subscribers. The company’s broadband customer base now stands at 17.4 million connections, and management confirmed it remains on track with fiber expansion plans. Despite these operational wins, investor sentiment remained cautious.
Revenue and Profitability Metrics Improve While Shares Decline
Consolidated operating revenue climbed 1.5% year-over-year to reach $34.3 billion for the quarter, driven primarily by strength in mobility and broadband offerings. Service revenue contributed $23.5 billion to the total, representing 2.9% growth, though equipment revenue fell 9% as fewer device upgrades occurred. Verizon shares continued to decline despite these gains in its high-margin service business.
Net income for the quarter rose 5.2% to $5.3 billion, while adjusted EBITDA jumped 8% to a record $13.8 billion. The company’s adjusted EBITDA margin expanded to 40.2%, marking a new milestone. Adjusted earnings per share reached $1.31, an 8.3% increase year-over-year, compared to reported EPS of $1.25.
Cash generation remained robust, with operating cash flow of $11.5 billion and free cash flow rising 12.1% to $7.8 billion for the quarter. Year-to-date through nine months, the company generated $18 billion in free cash flow and distributed $12.8 billion to shareholders through dividends and buybacks. Net unsecured debt declined to $123.7 billion, yet the stock still closed in negative territory.
Management Raises Outlook for Third Time as AWS Partnership Announced
Company leadership increased its full-year postpaid phone net addition forecast to a range of 1.1 million to 1.2 million subscribers. Adjusted earnings per share guidance was also raised to $5.04 to $5.06, marking the third consecutive quarter of upward revisions. The stock nonetheless failed to respond positively to the improved outlook.
Free cash flow growth expectations were revised upward to approximately 12% for the full year, an increase from the prior 9% to 10% forecast. Management maintained its capital expenditure guidance at $16 billion to $16.5 billion while projecting operating cash flow growth of 3.5% to 5%. The disconnect between strengthening fundamentals and stock performance highlighted investor caution.
Verizon also announced a multi-year partnership with Amazon Web Services valued at more than $2 billion to build distributed computing capabilities supporting advanced artificial intelligence workloads. The framework leverages Verizon’s network infrastructure to meet escalating enterprise demand for AI computing power. Despite the strategic value of this agreement and improved financial projections, shares ended the session lower.
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