Verizon (VZ) Q3 2026 Earnings: 406,000 Postpaid Phone Adds With Lower Subsidies

Verizon's third-quarter 2026 earnings, reported on October 26, 2026 in an 8-K results release and on the earnings call, showed postpaid phone growth and cash generation running ahead of prior baselines, while broadband growth fell short [1][2]. Four questions mattered: growth with smaller subsidies, service revenue acceleration, fiber offsetting slower fixed wireless, and cost cuts turning into cash and lower leverage. Verizon added 406,000 postpaid phones [2]; mobility and broadband service revenue grew 2.9%, in line with the company's earlier "approaching 3.0%" outlook [1]; broadband net additions slowed to 314,000 [2]; and the net unsecured debt ratio fell to 2.3 times [3]. The quarter strengthens the case for the lower-subsidy model, but revenue per account is still falling, and part of the cash and leverage improvement depends on spending timing and financing structure.

Verizon provides mobile, broadband and business communications services to consumers, households, businesses and governments in the United States [4]. It earns most of its money from monthly recurring mobility and broadband service, which brought in about $23.5 billion in the third quarter [1], roughly 68% of total operating revenue of $34.31 billion [5].

Postpaid phone growth far ahead of the guidance pace, with lower subsidies

Postpaid phone net additions came in well above prior expectations. Verizon added 406,000 postpaid phones in the third quarter, compared with 44,000 a year earlier and 184,000 in the second quarter [2]. Consumer contributed 266,000 and business 140,000 [6]. The company raised its full-year net additions guidance from the upper half of 750,000 to 1.0 million to 1.1 million to 1.2 million [7], which implies 455,000 to 555,000 in the fourth quarter.

The growth did not come from heavier subsidies. The upgrade rate was 2.6%, versus 3.3% a year earlier [2], and management said upgrade volumes were down more than 20% year over year [6], while gross additions rose 11% [8]. Wireless equipment revenue fell 9.0% and equipment cost fell 10.2%, so the net loss on device sales narrowed from $864 million to $707 million [5].

Higher value per customer has not shown up yet. Postpaid ARPA (average monthly service revenue per account) was $168.08, down 1.9% year over year, a steeper decline than in the second quarter. Postpaid phone churn was 0.94%, 4 basis points better than a year earlier but above the second quarter's 0.92% [2]. Management said wireless service revenue will not return to year-over-year growth until the fourth quarter [6].

Fiber did not offset the fixed wireless slowdown

Broadband growth came in below the prior baseline. Third-quarter broadband net additions were 314,000, below 348,000 in the second quarter and 322,000 a year earlier. Fiber net additions were 155,000, flat with the second quarter, while fixed wireless access (FWA) net additions fell from 261,000 a year earlier to 159,000 [2].

Management described the FWA slowdown as a deliberate pullback. This quarter Verizon stopped selling FWA in areas where it cannot deliver the speed customers expect, and it plans to roll out a 1-gigabit FWA service over millimeter wave spectrum in metro areas starting in the fourth quarter, aiming to cover an additional 10 million to 15 million premises beyond its fiber footprint over the medium term [9]. The company said broadband ARPU rose year over year but gave no figure [9]. Incremental fiber revenue awaits the 10-Q.

Cost cuts turned into cash, and leverage fell to 2.3 times

Record margins confirmed the cost program is working. Adjusted EBITDA (excluding special items) was $13.80 billion, up 8.0% year over year [10], and the margin rose from 37.8% to 40.2% [11]. Management said the $9 billion cost reduction plan remains on track [9]. Consumer segment SG&A fell 2.9%, a smaller decline than the 4.1% for the first nine months [12], and total headcount rose from 89,900 at year-end to 93,300 [13].

Part of the free cash flow growth reflects spending timing. Third-quarter free cash flow was $7.80 billion, up 12.1%, and nine-month free cash flow rose 14.3%. Of the $845 million year-over-year increase in the quarter, $594 million, or about 70%, came from lower capital spending [14]. The company raised its full-year free cash flow forecast to $22.44 billion to $22.54 billion [15], which implies fourth-quarter free cash flow only 1.5% to 3.8% above the prior-year quarter.

The quality of deleveraging is weaker than the ratio suggests. Net unsecured debt fell by $4.96 billion: cash rose $2.74 billion and the 50% equity credit for junior subordinated notes rose $1.84 billion, while unsecured debt itself fell only $376 million, and total debt rose to $166.23 billion [16]. The company said it expects to reach its target leverage range during the 2027 timeframe [6].

Conclusion

Customer growth, margins and cash flow all improved this quarter, and Verizon raised its full-year adjusted EPS guidance to $5.04 to $5.06 [7]. Still, revenue per account is declining, the contribution of acquired fiber to service revenue growth has not been broken out, broadband growth slowed, and lower leverage rests mainly on cash and financing structure. The next report needs to show whether holiday-quarter net additions reach at least 455,000, whether revenue per account stops falling, whether service revenue growth reaches the company's expected roughly 4.0% [7], and whether broadband recovers and debt is actually repaid.

Sources

[1] VZ 8-K filed 2026-10-26 · Exhibit 99 3Q26 results release · 3Q 2026 Highlights, 2026-10-26

[2] VZ 8-K filed 2026-10-26 · Exhibit 99 3Q26 results release · Total Operating Statistics, 2026-10-26

[3] VZ 8-K filed 2026-10-26 · Exhibit 99 3Q26 results release · Consolidated Financial Results, 2026-10-26

[4] VZ 10-K filed 2026-02-17 · business description and two segments, 2026-02-17

[5] VZ 8-K filed 2026-10-26 · Exhibit 99 3Q26 results release · Condensed Consolidated Statements of Income, 2026-10-26

[6] VZ 3Q26 earnings call 2026-10-26 (Drillr earning_call_summary transcript) · CFO prepared remarks, 2026-10-26

[7] VZ 8-K filed 2026-10-26 · Exhibit 99 3Q26 results release · Outlook and Guidance, 2026-10-26

[8] VZ 3Q26 earnings call 2026-10-26 (Drillr earning_call_summary transcript) · Q&A (Hodulik), 2026-10-26

[9] VZ 3Q26 earnings call 2026-10-26 (Drillr earning_call_summary transcript) · CEO prepared remarks, 2026-10-26

[10] VZ 8-K filed 2026-10-26 · Exhibit 99 3Q26 results release · Non-GAAP Reconciliations - Consolidated EBITDA and Adjusted EBITDA, 2026-10-26

[11] VZ 8-K filed 2026-10-26 · Exhibit 99 3Q26 results release · Non-GAAP Reconciliations, 2026-10-26

[12] VZ 8-K filed 2026-10-26 · Exhibit 99 3Q26 results release · Consumer - Selected Financial Results, 2026-10-26

[13] VZ 8-K filed 2026-10-26 · Exhibit 99 3Q26 results release · Consolidated - Selected Financial and Operating Statistics, 2026-10-26

[14] VZ 8-K filed 2026-10-26 · Exhibit 99 3Q26 results release · Non-GAAP Reconciliations - Free Cash Flow, 2026-10-26

[15] VZ 8-K filed 2026-10-26 · Exhibit 99 3Q26 results release · Free Cash Flow Forecast for Full Year 2026, 2026-10-26

[16] VZ 8-K filed 2026-10-26 · Exhibit 99 3Q26 results release · Net Unsecured Debt reconciliation, 2026-10-26

Links for [1, 2, 3, 5, 7, 10, 11, 12, 13, 14, 15, 16]: https://www.sec.gov/Archives/edgar/data/732712/000073271226000049/a2026q3exhibit99.htm

Link for [4]: https://www.sec.gov/Archives/edgar/data/732712/000073271226000007/

Links for [6, 8, 9]: https://www.verizon.com/about/investors/quarterly-reports