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VZ Q2 Earnings Beat Estimates on Strong Margins, Outlook Lifted
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Key Takeaways
Verizon beat Q2 EPS estimates, delivered record adjusted EBITDA and raised 2026 guidance.
VZ added 184,000 postpaid phone users and 348,000 broadband subscribers, led by wireless and fiber growth.
VZ expanded adjusted EBITDA margin to 40.1% as stronger service revenues.
Verizon Communications Inc. (VZ - Free Report) reported adjusted earnings of $1.30 per share for the second quarter of 2026, up 6.6% year over year and ahead of the Zacks Consensus Estimate of $1.27 by 2.4%. Revenues of $34.25 billion declined 0.7% year over year and missed the consensus estimate of $35.26 billion by 2.9%.
The quarter reflected continued strength in profitability and subscriber trends. Verizon delivered 184,000 retail postpaid phone net additions, 348,000 broadband net additions and record adjusted EBITDA while raising its full-year 2026 guidance for the second consecutive quarter.
VZ Revenue Mix Shows Service-Led Growth
Mobility and broadband service revenues increased 2.8% year over year to approximately $23.4 billion, supported by continued wireless and broadband momentum. However, total operating revenues slipped to $34.25 billion as wireless equipment revenues declined sharply amid lower upgrade activity and the company's disciplined approach to promotional spending.
Management noted that equipment revenues fell nearly 20%, or more than $1.2 billion, primarily because customers are holding onto devices longer and Verizon is reducing device subsidy spending. The improvement in higher-quality service revenue continued to offset part of this pressure.
Verizon Communications Inc. Price, Consensus and EPS Surprise
Adjusted EBITDA climbed 7.2% year over year to a record $13.7 billion, while adjusted EPS increased 6.6% to $1.30. The adjusted EBITDA margin expanded to 40.1% from 37.1% a year ago, reflecting stronger operating leverage and disciplined execution.
Reported profitability, however, reflected sizable special items. Net income declined 22.9% year over year to $3.95 billion, while GAAP EPS fell to 92 cents from $1.18. The decline primarily stemmed from $1.8 billion of pretax special charges, including losses related to business dispositions, asset rationalization and severance expenses.
VZ Subscriber Trends Continue to Improve
Verizon posted 184,000 postpaid phone net additions during the quarter, marking its strongest consumer second-quarter performance in five years. Core prepaid net additions totaled 73,000, extending the company's streak of positive prepaid subscriber growth to eight consecutive quarters.
Broadband remained another bright spot. The company added 348,000 broadband subscribers, including 193,000 fixed wireless access customers and 155,000 fiber broadband customers. Verizon ended the quarter with approximately 17.1 million fixed wireless access and fiber broadband connections while generating more than 550,000 combined mobility and broadband net additions during the quarter.
Verizon Generates Strong Cash Flow
Cash generation remained robust during the first half of 2026. Cash flow from operations increased 9.9% year over year to $18.4 billion, while free cash flow rose 16.0% to $10.2 billion. Second-quarter cash flow from operations advanced 16.3%, and free cash flow climbed 24.4%, underscoring the company's improving earnings quality.
Capital expenditures totaled $8.2 billion through the first half as Verizon continued investing in network expansion. The company also completed $3.5 billion of share repurchases year to date and raised its full-year buyback target to as much as $4.5 billion. Net unsecured debt stood at $128.7 billion at quarter-end, with the net unsecured debt-to-adjusted EBITDA ratio at 2.5 times.
VZ Raises 2026 Earnings Outlook Again
Encouraged by strong second-quarter execution, Verizon raised its full-year adjusted EPS outlook to $4.99-$5.04, representing 6-7% annual growth compared with its prior expectation of approximately $4.90-$4.95. The company also increased its mobility and broadband service revenue growth outlook to 2.5-3% from the prior 2-3% range.
Management now expects total retail postpaid phone net additions to finish in the upper half of its 750,000 to 1 million range. Verizon reaffirmed its capital expenditure outlook of $16-$16.5 billion while projecting cash flow from operations growth of approximately 2-4% and free cash flow growth of 9-10% for 2026.
Arista Networks Inc. (ANET - Free Report) is scheduled to release second-quarter 2026 earnings on Aug. 8. The Zacks Consensus Estimate for earnings is pegged at 89 cents per share, suggesting growth of 21.92% from the year-ago reported figure.
Arista has a long-term earnings growth expectation of 19.86%. The company delivered an average earnings surprise of 8.31% in the last four reported quarters.
Amphenol Corporation (APH - Free Report) is set to release second-quarter 2026 earnings on July 29. The Zacks Consensus Estimate for earnings is pegged at $1.19 per share, implying growth of 46.91% from the year-ago reported figure.
Amphenol has a long-term earnings growth expectation of 24.01%. The company delivered an average earnings surprise of 14.08% in the last four reported quarters.
Corning Incorporated (GLW - Free Report) is set to release second-quarter 2026 earnings on July 28. The Zacks Consensus Estimate for earnings is pegged at 76 cents per share, implying growth of 26.67% from the year-ago reported figure.
Corning has a long-term earnings growth expectation of 23.89%. The company delivered an average earnings surprise of 2.41% in the last four reported quarters.
View the Zacks #1 Rank List
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VZ Q2 Earnings Beat Estimates on Strong Margins, Outlook Lifted
Key Takeaways
Verizon Communications Inc. (VZ - Free Report) reported adjusted earnings of $1.30 per share for the second quarter of 2026, up 6.6% year over year and ahead of the Zacks Consensus Estimate of $1.27 by 2.4%. Revenues of $34.25 billion declined 0.7% year over year and missed the consensus estimate of $35.26 billion by 2.9%.
The quarter reflected continued strength in profitability and subscriber trends. Verizon delivered 184,000 retail postpaid phone net additions, 348,000 broadband net additions and record adjusted EBITDA while raising its full-year 2026 guidance for the second consecutive quarter.
VZ Revenue Mix Shows Service-Led Growth
Mobility and broadband service revenues increased 2.8% year over year to approximately $23.4 billion, supported by continued wireless and broadband momentum. However, total operating revenues slipped to $34.25 billion as wireless equipment revenues declined sharply amid lower upgrade activity and the company's disciplined approach to promotional spending.
Management noted that equipment revenues fell nearly 20%, or more than $1.2 billion, primarily because customers are holding onto devices longer and Verizon is reducing device subsidy spending. The improvement in higher-quality service revenue continued to offset part of this pressure.
Verizon Communications Inc. Price, Consensus and EPS Surprise
Verizon Communications Inc. price-consensus-eps-surprise-chart | Verizon Communications Inc. Quote
Verizon Expands Profitability Despite Revenue Pressure
Adjusted EBITDA climbed 7.2% year over year to a record $13.7 billion, while adjusted EPS increased 6.6% to $1.30. The adjusted EBITDA margin expanded to 40.1% from 37.1% a year ago, reflecting stronger operating leverage and disciplined execution.
Reported profitability, however, reflected sizable special items. Net income declined 22.9% year over year to $3.95 billion, while GAAP EPS fell to 92 cents from $1.18. The decline primarily stemmed from $1.8 billion of pretax special charges, including losses related to business dispositions, asset rationalization and severance expenses.
VZ Subscriber Trends Continue to Improve
Verizon posted 184,000 postpaid phone net additions during the quarter, marking its strongest consumer second-quarter performance in five years. Core prepaid net additions totaled 73,000, extending the company's streak of positive prepaid subscriber growth to eight consecutive quarters.
Broadband remained another bright spot. The company added 348,000 broadband subscribers, including 193,000 fixed wireless access customers and 155,000 fiber broadband customers. Verizon ended the quarter with approximately 17.1 million fixed wireless access and fiber broadband connections while generating more than 550,000 combined mobility and broadband net additions during the quarter.
Verizon Generates Strong Cash Flow
Cash generation remained robust during the first half of 2026. Cash flow from operations increased 9.9% year over year to $18.4 billion, while free cash flow rose 16.0% to $10.2 billion. Second-quarter cash flow from operations advanced 16.3%, and free cash flow climbed 24.4%, underscoring the company's improving earnings quality.
Capital expenditures totaled $8.2 billion through the first half as Verizon continued investing in network expansion. The company also completed $3.5 billion of share repurchases year to date and raised its full-year buyback target to as much as $4.5 billion. Net unsecured debt stood at $128.7 billion at quarter-end, with the net unsecured debt-to-adjusted EBITDA ratio at 2.5 times.
VZ Raises 2026 Earnings Outlook Again
Encouraged by strong second-quarter execution, Verizon raised its full-year adjusted EPS outlook to $4.99-$5.04, representing 6-7% annual growth compared with its prior expectation of approximately $4.90-$4.95. The company also increased its mobility and broadband service revenue growth outlook to 2.5-3% from the prior 2-3% range.
Management now expects total retail postpaid phone net additions to finish in the upper half of its 750,000 to 1 million range. Verizon reaffirmed its capital expenditure outlook of $16-$16.5 billion while projecting cash flow from operations growth of approximately 2-4% and free cash flow growth of 9-10% for 2026.
VZ’s Zacks Rank
VZ currently carries 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 second-quarter 2026 earnings on Aug. 8. The Zacks Consensus Estimate for earnings is pegged at 89 cents per share, suggesting growth of 21.92% from the year-ago reported figure.
Arista has a long-term earnings growth expectation of 19.86%. The company delivered an average earnings surprise of 8.31% in the last four reported quarters.
Amphenol Corporation (APH - Free Report) is set to release second-quarter 2026 earnings on July 29. The Zacks Consensus Estimate for earnings is pegged at $1.19 per share, implying growth of 46.91% from the year-ago reported figure.
Amphenol has a long-term earnings growth expectation of 24.01%. The company delivered an average earnings surprise of 14.08% in the last four reported quarters.
Corning Incorporated (GLW - Free Report) is set to release second-quarter 2026 earnings on July 28. The Zacks Consensus Estimate for earnings is pegged at 76 cents per share, implying growth of 26.67% from the year-ago reported figure.
Corning has a long-term earnings growth expectation of 23.89%. The company delivered an average earnings surprise of 2.41% in the last four reported quarters.