Key Notes
- Verizon’s adjusted EPS of $1.31 beat the $1.28 estimate, while revenue of about $34.3 billion missed consensus.
- The carrier raised its full-year adjusted EPS outlook to $5.04–$5.06 after adding 406,000 postpaid phone subscribers.
- Quarterly free cash flow reached $7.8 billion, and a new AWS agreement adds to Verizon’s AI infrastructure opportunity.
Verizon Communications Inc. (NYSE: VZ) beat third-quarter profit expectations and raised its full-year outlook on October 26, as stronger subscriber growth and improved profitability offset a shortfall in revenue. The carrier also announced an agreement valued at more than $2 billion with Amazon Web Services.
Adjusted earnings were $1.31 a share, compared with the $1.28 consensus cited by Investing.com. Revenue of approximately $34.31 billion rose 1.5% from a year earlier but missed that provider’s $34.77 billion estimate.
The results offer investors a distinction between growth in headline sales and the cash generated by the business. Verizon delivered higher adjusted earnings and cash flow even as reduced handset upgrades weighed on equipment revenue.
Profit Beats Expectations as Revenue Falls Short
Verizon’s results show a stronger operating performance beneath the modest increase in total revenue. The main figures were:
- Adjusted earnings per share: $1.31, versus the $1.28 estimate cited by Investing.com; reported EPS was $1.25.
- Operating revenue: approximately $34.3 billion, up 1.5% year over year, but below consensus.
- Adjusted EBITDA: $13.80 billion, up 8%, compared with the $13.73 billion consensus cited by StockStory.
- Capital expenditures: $3.72 billion, down from $4.31 billion a year earlier.
The $13.80 billion figure is adjusted earnings before interest, taxes, depreciation and amortization, not adjusted revenue. It is a non-GAAP profitability measure and should be assessed alongside reported earnings and cash flow.
Equipment revenue declined 9%, which Verizon attributed to customers keeping devices longer and its decision to reduce device subsidies. Lower equipment sales can restrain total revenue without producing the same effect on recurring service income. Investors therefore need to distinguish the two when assessing the quarter.
Subscriber Growth Supports the Higher Outlook
Verizon added 406,000 postpaid phone subscribers, nearly twice the 209,439 expected by analysts polled by Visible Alpha, according to Reuters. These are customers with recurring monthly bills, making retention and service spending important to their financial value.
The carrier increased its full-year postpaid phone additions target to 1.1 million–1.2 million. It also raised adjusted EPS guidance to $5.04–$5.06 from $4.99–$5.04, marking another improvement in its earnings outlook.
The company also added 314,000 broadband connections, comprising 159,000 fixed wireless and 155,000 fiber additions. That extends the customer-growth story beyond mobile phones, although each service has different buildout costs and revenue characteristics.
Higher additions strengthen the operating picture, but subscriber counts alone do not establish the return on winning those customers. Pricing, promotional costs, churn and the amount each customer spends also affect profitability. Verizon’s emphasis on simpler plans and lower subsidies makes those measures particularly relevant.
Cash Flow Improves as Quarterly Investment Declines
The company’s accompanying financial schedules show operating cash flow of $11.52 billion and free cash flow of $7.80 billion. Free cash flow deducts capital expenditure from operating cash generation; it is not interchangeable with net income or adjusted EBITDA.
Lower quarterly capex helped the difference between those cash-flow measures. However, a single quarter’s spending does not establish a permanent reduction in investment needs. Verizon maintained its full-year capex outlook of $16 billion–$16.5 billion.
Verizon returned $12.8 billion to shareholders in the first nine months, including $8.8 billion in dividends and $4 billion of share repurchases. Those distributions compete with network expansion and debt reduction for cash, making the relationship between operating cash generation and investment central to assessing its capital returns.
AWS Agreement Extends the Infrastructure Opportunity
The new agreement with Amazon’s (NASDAQ: AMZN) AWS cloud business is a commercial framework for distributed computing and AI workloads. Reuters reported that Verizon will provide high-capacity fiber connections between AWS data centers.
The relationship predates this quarter. Verizon announced an earlier AWS fiber agreement in November 2025. The latest deal’s stated value should not be treated as revenue already recognized in the third quarter or as an annual revenue commitment.
The opportunity involves selling connectivity for the infrastructure supporting AI, alongside the established wireless and broadband businesses. Its eventual contribution will depend on delivery, investment requirements and the timing of revenue recognition.
Earnings Put Operating Performance Back in Focus
The report follows a difficult period for telecom stocks. We previously reported on the October selloff sparked by Starlink mobile plans from SpaceX (NASDAQ: SPCX). The latest earnings provide fresh operating data against that backdrop of heightened concern about wireless competition.
The quarter provides fresh evidence on the business investors are valuing: a profit beat, higher subscriber guidance and stronger cash generation, balanced against a revenue miss and continuing network investment. The next test is whether Verizon can sustain those improvements as it competes for customers and expands its infrastructure business.
