Verizon (VZ.US) Q3 results were mixed, and Amazon AWS reached an AI infrastructure agreement of over $2 billion
The Zhitong Finance App learned that before the US stock market on Monday, US telecom giant Verizon (VZ.US) announced financial results for the third quarter of 2026. According to financial reports, Verizon's total revenue for the third quarter was US$34.3 billion, up 1.5% year on year, but fell short of market expectations; adjusted earnings per share were US$1.31, better than market expectations. Thanks to improved operational efficiency, the company's net profit and adjusted EBITDA both hit record highs, and the annual results guidance was raised for the third consecutive quarter. Meanwhile, Verizon announced the expansion of strategic cooperation with Amazon AWS to reach an artificial intelligence (AI) infrastructure agreement worth more than 2 billion US dollars. The stock rose nearly 1% in the premarket.
Strong core performance, with many indicators reaching record highs
Among them, mobile and broadband service revenue reached US$23.5 billion, up 2.9% year on year, continuing the accelerated growth trend of the previous two quarters.
In terms of profitability, the company has demonstrated strong operational efficiency:
Net profit: reached 5.3 billion US dollars, up 5.2% year on year; net profit margin increased to 15.5% from 14.9% in the same period last year.
Adjusted EBITDA: recorded a year-on-year increase of 8.0% of US$13.8 billion, the highest quarterly record in the company's history.
Earnings per share (EPS): $1.25, up 6.8% year over year; adjusted EPS was $1.31, up 8.3% year over year.
In terms of cash flow, operating cash flow in the third quarter reached 11.5 billion US dollars, up 2.2% year on year; free cash flow reached 7.8 billion US dollars, a sharp increase of 12.1% year on year.
Mobile and broadband services exploded, and the user churn rate reached a record low
Verizon CEO Dan Schulman said, “Over the past year of the transformation, Verizon has become fundamentally stronger operationally, financially, and competitively. By prioritizing customer-first services such as' Simplicity 'and loyalty programs rather than relying on high subsidies, we are winning high-value loyal customers while increasing profit margins and reducing attrition rates.”
User data confirms the success of this strategy:
Postpaid mobile phone users: A net increase of 406,000 households, a year-on-year surge of more than 820%, the best third quarter performance in five years.
Postpaid accounts: Net increase of 137,000 households, the best performance in more than 10 years.
Loss rate: The dropout rate of postpaid phones improved by 4 basis points year-on-year to 0.94%.
Broadband business: Net increase of 314,000 households (including 159,000 fixed wireless users and 155,000 optical fiber subscribers). Currently, the total number of broadband connections reached 17.4 million, and more than half of the new fiber-optic users chose 1G or higher. The company expects fiber coverage to exceed 32 million households by the end of this year.
Join hands with AWS to boost AI infrastructure
While the traditional telecom business is growing steadily, Verizon is actively expanding its technology infrastructure. The company announced that it has reached a cooperation agreement with Amazon Web Services (AWS) worth more than $2 billion. The agreement establishes a commercial framework aimed at scaling distributed computing to meet the real-time requirements of generative AI and AI agent (Agentic AI) workloads.
Schulman emphasized that tech giants are choosing Verizon's fiber optic network to drive the next generation of AI infrastructure, which opens up new room for growth for the company.
Financial discipline paid off, and annual guidelines were raised for the third consecutive quarter
Based on strong performance in the third quarter, Verizon announced an increase in the 2026 full-year results guidance. This is also the third time in a row that the company has raised key indicators this year:
Net increase in post-paid mobile phone users: raised to 1.1 million to 1.2 million (previously forecast in the first half of 750,000 to 1 million households). This figure will more than triple compared to 2025.
Adjusted EPS: Up to $5.04 to $5.06 (up 7.0% to 7.5% year over year), with an increase of 6.0% to 7.0% previously expected.
Free cash flow: The year-on-year increase is expected to be close to 12.0% (the previous forecast was 9.0% to 10.0%).
Capital expenditure: Remains between $16 billion and $16.5 billion, including successful investments in AI Connect.
In addition, the financial report mentioned that equipment revenue in the third quarter fell 9.0% year-on-year due to extended user switching cycles and the company's strategic decision to actively reduce equipment subsidies. This reflects Verizon's evolution towards a more self-regulated and structured business model. In terms of shareholder returns, the company returned US$12.8 billion in capital to shareholders in the first nine months of this year, an increase of 49% over the previous year.