- Verizon added 406,000 monthly-bill-paying wireless subscribers in the third quarter, nearly double the Visible Alpha estimate of 209,439, or about 94% above it (Lumida calculation). The carrier credited demand for its simplified plans, including the Simplicity plan launched in June with transparent pricing and unlimited data.
- Verizon raised its forecast for postpaid phone subscriber additions this year to 1.1 million to 1.2 million from 750,000 to 1 million, and lifted its full-year adjusted EPS outlook to $5.04 to $5.06 from $4.99 to $5.04.
- The weak spot was revenue, which came in at $34.3 billion against the $34.74 billion LSEG estimate, as customers held on to their phones longer after Verizon began cutting device subsidies. Lower upgrade volumes reduce equipment sales even as the subscriber base grows.
- Verizon also signed an AI infrastructure deal worth more than $2 billion with Amazon Web Services to provide high-capacity fiber connectivity for AWS data centers. It follows a more than $1 billion dark-fiber agreement with Google in July, pointing to a new revenue stream beyond wireless and broadband.
What Happened?
Verizon reported third-quarter results Monday, posting 406,000 monthly-bill-paying wireless subscriber additions against analyst expectations of 209,439. It raised its full-year outlook for postpaid phone subscriber additions to 1.1 million to 1.2 million and its adjusted EPS forecast to $5.04 to $5.06. Revenue of $34.3 billion missed the $34.74 billion estimate, pressured by lower device upgrade volumes after Verizon cut subsidies. Under the new deal with AWS, Verizon will supply high-capacity fiber-optic connectivity for AWS data centers to support AI computing workloads. The results come a year into CEO Dan Schulman’s tenure, during which Verizon has restructured operations and simplified its wireless offerings.
Why It Matters?
The quarter suggests Schulman’s overhaul is working where it counts most for a carrier, in adding paying phone customers, even though it costs some equipment revenue. Cutting device subsidies trades near-term revenue for better margins on service, which may help explain why EPS guidance rose despite the top-line miss. The AWS and Google fiber deals give Verizon a way to monetize its network in the AI buildout, a market that has mostly rewarded chipmakers, cloud providers and data center owners so far. That could help change how investors value a telecom stock.
What’s Next?
Investors will watch whether subscriber momentum holds into the fourth quarter, a quarter that includes the holiday shopping season. More AI connectivity contracts with hyperscalers would show whether the AWS and Google deals are the start of a durable business line. Watch also whether longer phone upgrade cycles keep pressuring revenue in coming quarters. Rival carriers’ results will show whether Verizon is taking share or the whole industry is benefiting.
Affected Tickers and Coins: VZ, AMZN, GOOGL
Source: CNBC
