Verizon's subscriber adds nearly doubled estimates, but revenue fell short
Verizon raised its adjusted EPS forecast and signed an AI fiber deal with Amazon Web Services. Revenue missed estimates, and equipment sales fell as it cut device subsidies.
By Marcus Rodriguez ·
Why it matters: Verizon beat on subscribers and raised its EPS forecast, but revenue missed.
For information only, not investment advice. Prices delayed.
Verizon ($VZ) signed up far more phone customers than Wall Street expected in the third quarter. It added 406,000 monthly-bill-paying wireless subscribers, nearly double the analysts' estimate of 209,439 from Visible Alpha, Reuters reported. Verizon also raised its full-year adjusted earnings-per-share forecast to $5.04 to $5.06, from $4.99 to $5.04, according to Reuters. And it announced an AI infrastructure agreement with Amazon Web Services that it values at more than $2.0 billion.
The softer number was revenue. Total operating revenue was $34.3 billion, up 1.5% from a year earlier, Verizon said. That fell short of the $34.74 billion analysts expected, according to LSEG data cited by Reuters. Verizon said 2.9% growth in mobility and broadband service revenue was offset by a 9.0% drop in equipment revenue.
Verizon attributed that drop mainly to fewer upgrades, as customers hold on to their phones longer, and to its own strategic decision to cut spending on device subsidies. So by Verizon's account, part of the equipment decline is by design: it is spending less to get people into new phones. It also said postpaid phone churn, the rate at which those customers leave, improved by 4 basis points from a year earlier to 0.94%.
The AWS agreement, Verizon said, sets up a commercial framework to scale distributed computing for agentic and generative AI workloads. Under the deal, Verizon will provide high-capacity fiber-optic connectivity for AWS data centers, Reuters reported. It follows a more than $1 billion agreement with Google, announced in July, to connect data centers using dark fiber, according to Reuters. Reuters said that deal points to a possible new revenue stream for telecom operators beyond wireless and broadband.
Verizon delivered another record-breaking quarter. One year into our transformation, Verizon is fundamentally stronger — operationally, financially, and competitively.
Verizon shares were down 3.49% at $43.10 as of Oct 26, 4:00 PM ET, according to Sainteur's ticker. Amazon ($AMZN) rose 0.44% to $249.09 as of the same time.
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Tags: earnings · guidance · ai · analysts