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VZ Beats Q1 Earnings Estimates on Strong Margins, Misses on Revenues
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Key Takeaways
Verizon Q1 adjusted earnings rose 7.6% to $1.28, beating estimates; revenue grew to $34.44B but missed.
VZ posted record adjusted EBITDA of $13.4B as SG&A fell 3.1%, though interest expense jumped 18.9%.
VZ added 341K broadband subs and 55K postpaid phone adds; it raised 2026 adjusted EPS view to $4.95-$4.99.
Verizon Communications Inc. (VZ - Free Report) reported adjusted earnings of $1.28 per share for the first quarter of 2026, which jumped 7.6% year over year and beat the Zacks Consensus Estimate of $1.22 by 4.9%.
Total operating revenue rose 2.9% from the year-ago quarter to $34.44 billion but missed the consensus mark of $35.03 billion by 1.7%. The quarter featured 341,000 broadband net additions, led by fixed wireless access growth.
VZ Revenue Mix Reflects Service-Led Momentum
Service revenues and other increased 2.4% year over year to $28.76 billion, supported by mobility and broadband service trends. Wireless equipment revenue climbed 5.2% to $5.68 billion, even as management pointed to moderated upgrade activity tied to a disciplined approach to promotional spending.
Within reportable segments, Consumer operating revenue grew 4.5% to $25.00 billion, driven by higher mobility and broadband service revenue and a lift in wireless equipment sales. Business revenue was essentially flat at $5.98 billion, as growth in “Other” revenue helped offset pressure in mobility and broadband service revenue.
Verizon Expands Profitability With Better Operating Leverage
Net income attributable to Verizon rose 3.4% year over year to $5.05 billion, while operating income improved 3.3% to $8.24 billion. Total operating expenses increased 2.7% to $26.20 billion, with selling, general and administrative expenses down 3.1%, partially offset by higher depreciation and amortization expenses.
Adjusted EBITDA increased 6.7% year over year to $13.4 billion, marking the company’s highest quarterly adjusted EBITDA, as cited by management. Interest expense rose 18.9% to $1.94 billion, a notable headwind versus the year-ago quarter.
Verizon Communications Inc. Price, Consensus and EPS Surprise
VZ Wireless Metrics Improve as Churn and Adds Rebound
VZ posted total postpaid phone net additions of 55,000 in the quarter, its first positive first-quarter result since 2013, supported by improvements in customer acquisition and churn trends highlighted by management. Core prepaid net additions were 115,000, extending a multi-quarter growth streak.
Mobility and broadband service revenue reached about $22.9 billion, increasing 1.6% year over year, though the company noted an 80-basis-point impact to wireless service revenue growth from a January network outage. Verizon ended the quarter with roughly 16.8 million fixed wireless access and fiber broadband connections, reflecting continued scale in its broadband footprint.
Verizon Cash Flow Enables Deleveraging and Buybacks
Cash flow from operating activities was $8.0 billion compared with $7.8 billion in the prior-year quarter, while free cash flow improved to $3.8 billion from $3.6 billion. Capital expenditures totaled $4.2 billion as Verizon maintained its network build pace across mobility and fiber. The company repurchased $2.5 billion of shares during the quarter and reiterated that it remains on track for at least $3.0 billion of buybacks for the full year. Verizon also emphasized progress on Frontier-related debt reduction, noting it had paid down about half since the acquisition closed and expects to repay substantially all of that debt by year-end.
VZ Lifts 2026 Adjusted Earnings Outlook
Backed by first-quarter execution, VZ raised its 2026 adjusted earnings guidance to $4.95-$4.99 per share, implying 5.0%-6.0% year-over-year growth, up from $4.90-$4.95 expected earlier. It also tightened expectations for total retail postpaid phone net additions to the upper half of its 750,000 to 1.0 million range.
For 2026, Verizon continues to project total mobility and broadband service revenue growth of 2.0%-3.0%, cash flow from operations of $37.5-$38.0 billion, capital expenditures of $16.0-$16.5 billion, and free cash flow of $21.5 billion or more.
Arista Networks Inc. (ANET - Free Report) is scheduled to release first-quarter 2026 earnings on May 5. The Zacks Consensus Estimate for earnings is pegged at 81 cents per share, suggesting a growth of 24.6% from the year-ago reported figure.
Arista has a long-term earnings growth expectation of 17.9%. Arista delivered an average earnings surprise of 9% in the last four reported quarters.
Akamai Technologies, Inc. (AKAM - Free Report) is slated to release first-quarter 2026 earnings on May 7. The Zacks Consensus Estimate for earnings is pegged at $1.61 per share, indicating a 5.3% decline from the year-ago reported figure.
Akamai has a long-term earnings growth expectation of 7%. Akamai delivered an average earnings surprise of 9.4% in the last four reported quarters.
Pinterest, Inc. (PINS - Free Report) is set to release first-quarter 2026 earnings on May 4. The Zacks Consensus Estimate for earnings is pegged at 22 cents per share, implying a fall of 4.3% from the year-ago reported figure.
Pinterest has a long-term earnings growth expectation of 24.5%. Pinterest delivered an average negative earnings surprise of 3.6% in the last four reported quarters.
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VZ Beats Q1 Earnings Estimates on Strong Margins, Misses on Revenues
Key Takeaways
Verizon Communications Inc. (VZ - Free Report) reported adjusted earnings of $1.28 per share for the first quarter of 2026, which jumped 7.6% year over year and beat the Zacks Consensus Estimate of $1.22 by 4.9%.
Total operating revenue rose 2.9% from the year-ago quarter to $34.44 billion but missed the consensus mark of $35.03 billion by 1.7%. The quarter featured 341,000 broadband net additions, led by fixed wireless access growth.
VZ Revenue Mix Reflects Service-Led Momentum
Service revenues and other increased 2.4% year over year to $28.76 billion, supported by mobility and broadband service trends. Wireless equipment revenue climbed 5.2% to $5.68 billion, even as management pointed to moderated upgrade activity tied to a disciplined approach to promotional spending.
Within reportable segments, Consumer operating revenue grew 4.5% to $25.00 billion, driven by higher mobility and broadband service revenue and a lift in wireless equipment sales. Business revenue was essentially flat at $5.98 billion, as growth in “Other” revenue helped offset pressure in mobility and broadband service revenue.
Verizon Expands Profitability With Better Operating Leverage
Net income attributable to Verizon rose 3.4% year over year to $5.05 billion, while operating income improved 3.3% to $8.24 billion. Total operating expenses increased 2.7% to $26.20 billion, with selling, general and administrative expenses down 3.1%, partially offset by higher depreciation and amortization expenses.
Adjusted EBITDA increased 6.7% year over year to $13.4 billion, marking the company’s highest quarterly adjusted EBITDA, as cited by management. Interest expense rose 18.9% to $1.94 billion, a notable headwind versus the year-ago quarter.
Verizon Communications Inc. Price, Consensus and EPS Surprise
Verizon Communications Inc. price-consensus-eps-surprise-chart | Verizon Communications Inc. Quote
VZ Wireless Metrics Improve as Churn and Adds Rebound
VZ posted total postpaid phone net additions of 55,000 in the quarter, its first positive first-quarter result since 2013, supported by improvements in customer acquisition and churn trends highlighted by management. Core prepaid net additions were 115,000, extending a multi-quarter growth streak.
Mobility and broadband service revenue reached about $22.9 billion, increasing 1.6% year over year, though the company noted an 80-basis-point impact to wireless service revenue growth from a January network outage. Verizon ended the quarter with roughly 16.8 million fixed wireless access and fiber broadband connections, reflecting continued scale in its broadband footprint.
Verizon Cash Flow Enables Deleveraging and Buybacks
Cash flow from operating activities was $8.0 billion compared with $7.8 billion in the prior-year quarter, while free cash flow improved to $3.8 billion from $3.6 billion. Capital expenditures totaled $4.2 billion as Verizon maintained its network build pace across mobility and fiber. The company repurchased $2.5 billion of shares during the quarter and reiterated that it remains on track for at least $3.0 billion of buybacks for the full year. Verizon also emphasized progress on Frontier-related debt reduction, noting it had paid down about half since the acquisition closed and expects to repay substantially all of that debt by year-end.
VZ Lifts 2026 Adjusted Earnings Outlook
Backed by first-quarter execution, VZ raised its 2026 adjusted earnings guidance to $4.95-$4.99 per share, implying 5.0%-6.0% year-over-year growth, up from $4.90-$4.95 expected earlier. It also tightened expectations for total retail postpaid phone net additions to the upper half of its 750,000 to 1.0 million range.
For 2026, Verizon continues to project total mobility and broadband service revenue growth of 2.0%-3.0%, cash flow from operations of $37.5-$38.0 billion, capital expenditures of $16.0-$16.5 billion, and free cash flow of $21.5 billion or more.
Zacks Rank
Verizon currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
Arista Networks Inc. (ANET - Free Report) is scheduled to release first-quarter 2026 earnings on May 5. The Zacks Consensus Estimate for earnings is pegged at 81 cents per share, suggesting a growth of 24.6% from the year-ago reported figure.
Arista has a long-term earnings growth expectation of 17.9%. Arista delivered an average earnings surprise of 9% in the last four reported quarters.
Akamai Technologies, Inc. (AKAM - Free Report) is slated to release first-quarter 2026 earnings on May 7. The Zacks Consensus Estimate for earnings is pegged at $1.61 per share, indicating a 5.3% decline from the year-ago reported figure.
Akamai has a long-term earnings growth expectation of 7%. Akamai delivered an average earnings surprise of 9.4% in the last four reported quarters.
Pinterest, Inc. (PINS - Free Report) is set to release first-quarter 2026 earnings on May 4. The Zacks Consensus Estimate for earnings is pegged at 22 cents per share, implying a fall of 4.3% from the year-ago reported figure.
Pinterest has a long-term earnings growth expectation of 24.5%. Pinterest delivered an average negative earnings surprise of 3.6% in the last four reported quarters.