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Verizon (VZ) delivered an earnings beat and its third consecutive guidance increase, with stronger customer acquisition, lower churn, and record profitability offsetting equipment-sales weakness. The revenue miss warrants attention, but reduced subsidies and promotional costs suggest improving customer economics, while SpaceX’s (SPCX) wireless ambitions remain a longer-term competitive risk.

• Adjusted EPS rose 8.3% to $1.31 versus the $1.27 FactSet consensus, while revenue increased 1.5% to $34.3 bln versus $34.77 bln expected. FY26 adjusted EPS guidance increased to $5.04–$5.06 from the prior 6–7% growth framework, exceeding the $5.00 consensus. Postpaid phone net-add guidance rose to 1.1–1.2 mln from the upper half of 750,000–1.0 mln.
• Phone net additions reached 406,000 versus 44,000 a year earlier and 184,000 in Q2, while 137,000 account additions reversed prior-year losses. Phone churn improved 4 bps to 0.94%, promotional acquisition costs declined 41%, and retention costs improved 30%, supporting management’s emphasis on profitable growth.
• Mobility and broadband service revenue increased 2.9% to $23.5 bln, versus 2.8% growth in Q2, but equipment revenue declined 9% as upgrades fell 20.3%. Broadband additions totaled 314,000, including 159,000 fixed-wireless and 155,000 fiber connections, down from 348,000 in Q2. FY26 service-revenue growth is expected in the upper half of 2.5–3%, with approximately 4% in Q4. Financial guidance includes Frontier, limiting organic comparisons.
• Adjusted EBITDA increased 8% to a record $13.8 bln, with margin expanding 240 bps to 40.2%. These gains indicate that lower equipment sales and subsidy spending can coexist with stronger profitability.
• The more-than-$2 bln AWS agreement provides another avenue to monetize VZ’s infrastructure, but revenue timing and margins were not disclosed. FY26 capex remains $16.0–$16.5 bln, including success-based AI Connect investments.
• Nine-month operating cash flow increased to $29.9 bln, while lower capex helped free cash flow rise 14.3% to $18.0 bln. FY26 free-cash-flow growth guidance increased to approaching 12% from 9–10%. Shareholder returns reached $12.8 bln, although total debt increased yr/yr to $166.2 bln and net unsecured leverage reached 2.3x.

Briefing.com Analyst Insight

VZ’s strongest achievement is improving subscriber growth while reducing acquisition costs and churn, providing tangible support for its turnaround. Sustaining those economics as service revenue accelerates would strengthen earnings and cash generation beyond equipment replacement cycles. The principal tests moving forward are restoring broadband momentum, demonstrating growth beyond Frontier’s contribution, and balancing infrastructure investment and shareholder returns with debt reduction as competition evolves.