Verizon (VZ) Earnings Preview — Q3 2026
Key Points
| Focus Area | Details & Signals to Watch |
|---|---|
| Guidance vs. Consensus | Company has raised 2026 guidance twice YTD; consensus expects continued acceleration in revenue, EBITDA, EPS |
| Revenue Growth | Mobility & broadband service revenue growth guided to 2.5–3.0% for FY26; Q4 expected at ~4% YoY |
| EPS / Profitability | Adjusted EPS guidance now $4.99–$5.04 (+6–7% YoY); consensus for Q3: $1.28 EPS GAAP |
| Free Cash Flow | FY26 FCF guidance raised to $21.9–$22.1B (+9–10% YoY); strong cash conversion, buybacks up to $4.5B |
| Churn & Net Adds | Postpaid phone net adds guided to upper half of 750k–1M range; churn improvement a key driver |
| ARPA/ARPU Trends | Simplicity plan is ARPA accretive; ARPA expected to turn positive in Q4 and into 2027 |
| Cost Structure | $9B cost program ($5B OpEx, $4B CapEx) on track; further efficiency expected into 2027/28 |
| AI Infrastructure | New multi-billion dollar AI Connect revenue stream to begin contributing in 2027 |
| Competitive Landscape | Subsidy-free model gaining traction; device upgrades down, churn down, account growth turning positive |
Most Important Factors for Q3 2026
| Factor | What to Watch For |
|---|---|
| Mobility & Broadband Revenue | Acceleration toward 3–4% YoY growth; Q3 guide is “approaching 3%” |
| Postpaid Phone Net Adds | Continued momentum; Q2 was 184k, H1 total 239k; Q3 should show further improvement |
| Churn Rate | Sequential and YoY improvement; Q2 Consumer postpaid phone churn was 0.84% (down 6 bps YoY) |
| ARPA/ARPU | Signs of stabilization or growth, especially from Simplicity/Verizon One plans |
| Cost Efficiency | Progress on $5B OpEx and $4B CapEx savings; margin expansion (Q2 adj. EBITDA margin 40.1%) |
| Free Cash Flow | Q2 FCF was $6.4B (+24% YoY); watch for continued ramp and progress toward $21.9–$22.1B FY target |
| Buybacks/Capital Returns | YTD buybacks $3.5B; full-year target up to $4.5B; dividend growth remains a priority |
| AI Infrastructure Revenue | Any incremental disclosures or early wins beyond the $1B+ Google deal |
| Broadband Net Adds | Q2: 348k; mix shift toward fiber, continued FWA growth, convergence attach rates |
| Account Growth | Q2 saw two months of positive account growth; Q3 expected to be positive for first time in years |
Forward Consensus vs. Company Guidance
Q3 2026 Consensus Estimates
| Metric | Consensus Estimate* |
|---|---|
| Revenue ($M) | $34,865 |
| EBITDA ($M) | $13,773 |
| Net Income ($M) | $5,373 |
| EPS (GAAP) | $1.28 |
| Cash Flow/Share ($) | $2.46 |
* Source: Company consensus data
FY 2026 Company Guidance (as of Q2 2026)
| Metric | Guidance (Revised Q2 2026) | Prior Guidance (Q1 2026) |
|---|---|---|
| Mobility & Broadband Service Rev | +2.5% to +3.0% YoY | +2.0% to +3.0% |
| Wireless Service Revenue | ~Flat YoY | ~Flat YoY |
| Adjusted EPS | $4.99–$5.04 (+6–7% YoY) | $4.95–$4.99 (+5–6% YoY) |
| Free Cash Flow | $21.9–$22.1B (+9–10% YoY) | $21.5B or more (+7% YoY) |
| Cash Flow from Operations | $37.9–$38.6B (+2.2–4.0% YoY) | $37.5–$38.0B |
| CapEx | $16.0–$16.5B | $16.0–$16.5B |
| Postpaid Phone Net Adds | Upper half of 750k–1M range | Upper half of 750k–1M range |
| Share Repurchases | Up to $4.5B (raised) | At least $3.0B |
How Did They Report Last Year? (Q3 2025)
| Metric | Q3 2025 Actuals | YoY Change vs. Q3 2024 |
|---|---|---|
| Revenue ($M) | $33,821 | +1.5% |
| Adjusted EBITDA ($M) | $12,775 | +2.3% |
| Net Income ($M) | $5,056 | +48.2% |
| EPS (GAAP) | $1.17 | +50.0% |
| Adjusted EPS | $1.21 | +1.7% |
| Free Cash Flow ($M) | $7,000 (quarter) | +17% YoY (Q3 only) |
| Postpaid Phone Net Adds | 44,000 | -73.7% |
| Consumer Churn | 0.91% | +8 bps |
- Q3 2025 was a solid quarter for revenue and profitability, but postpaid phone net adds were weak, and account growth was negative.
- The company faced a tough y/y comparable on net adds and churn, but not on revenue or profit.
Are They Coming Off a Tough Comparable?
- Net Adds: Yes. Q3 2025 postpaid phone net adds were only 44,000 (down sharply YoY), and account growth was negative. Q3 2026 is expected to show a significant improvement, with H1 2026 already at 239,000 postpaid phone net adds.
- Churn: Q3 2025 churn was elevated (Consumer postpaid phone churn 0.91%). Q2 2026 churn is now down to 0.84%, with further improvement expected.
- Revenue/Profit: Q3 2025 revenue and profit grew modestly; Q3 2026 is expected to accelerate, especially in mobility and broadband service revenue.
Summary and Conclusions
- Momentum Accelerating: Verizon has delivered two consecutive quarters of raised guidance in 2026, with operational and financial metrics showing clear improvement.
- Key Drivers for Q3 2026: Look for continued acceleration in mobility and broadband service revenue (targeting ~3% YoY), further improvement in postpaid phone net adds (expected to be at the top end of guidance), and ongoing sequential and YoY churn reduction.
- Cost Structure: The $9B cost program is on track, driving record adjusted EBITDA margin (Q2: 40.1%) and supporting higher free cash flow and capital returns.
- Business Model Shift: The new Simplicity and Verizon One plans are subsidy-free, ARPA accretive, and driving both account and line growth, especially in underpenetrated segments (youth, 1–2 line accounts).
- AI Infrastructure Upside: Multi-billion dollar AI Connect revenue stream (Google deal, others in pipeline) will begin to contribute in 2027, providing a new leg of growth above the core business.
- Capital Returns: Buybacks have been accelerated (up to $4.5B for FY26), and the dividend remains a priority.
- Comparables: Q3 2025 was a low point for net adds and churn; Q3 2026 is set up for strong YoY improvement on these KPIs, while revenue/profit comps are less challenging.
Table: Key Quarterly Financials and KPIs
| Quarter | Revenue ($M) | Adj. EBITDA ($M) | Net Income ($M) | EPS (GAAP) | Adj. EPS | FCF ($M) | Postpaid Phone Net Adds | Consumer Postpaid Churn |
|---|---|---|---|---|---|---|---|---|
| Q2 2026 | 34,253 | 13,723 | 3,949 | 0.92 | 1.30 | 6,426 | 184,000 | 0.84% |
| Q1 2026 | 34,440 | 13,395 | 5,146 | 1.20 | 1.28 | 3,783 | 55,000 | 0.90% |
| Q4 2025 | 36,381 | 11,860 | 2,448 | 0.55 | 1.09 | 616,000 | 0.95% | |
| Q3 2025 | 33,821 | 12,775 | 5,056 | 1.17 | 1.21 | 7,000 | 44,000 | 0.91% |
What to Listen for on the Call
- Confirmation of continued account growth (not just lines)
- Further evidence of ARPA/ARPU stabilization or growth
- Update on AI Connect pipeline and incremental revenue contribution timing
- Commentary on competitive dynamics and subsidy discipline during iPhone launch season
- Progress on cost structure and margin expansion
- Updated color on capital allocation priorities for 2027 and beyond
Conclusion:
Verizon enters Q3 2026 earnings with strong momentum, having raised guidance twice this year and delivered sequential improvements in all key metrics. The company is coming off a weak comparable for net adds and churn, setting up for a strong YoY print. The focus will be on sustaining revenue acceleration, maintaining cost discipline, and executing on the new business model (subsidy-free, customer-centric, AI-enabled). The market will be watching for continued progress on account growth, ARPA, and the ramp of new AI infrastructure revenues.
