Verizon (VZ.US) Q3 results mixed; reaches over US$2 billion AI infrastructure agreement with Amazon.com, Inc. AWS

Before the U.S. market opened on Monday, U.S. telecom giant Verizon (VZ.US) released its Q3 2026 financial results. The report showed that Verizon's Q3 total revenue was US$34.3 billion, up 1.5% year over year, but below market expectations; adjusted earnings per share were US$1.31, better than market expectations. Thanks to improved operating efficiency, the company's net profit and adjusted EBITDA both hit record highs, and it raised its full-year guidance for the third consecutive quarter. At the same time, Verizon announced an expanded strategic partnership with Amazon.com, Inc. AWS, reaching an artificial intelligence (AI) infrastructure agreement valued at more than US$2 billion. The stock rose nearly 1% in premarket trading. Core results strong, multiple metrics hit record highs Among them, mobile and broadband service revenue reached US$23.5 billion, up 2.9% year over year, extending the accelerating growth trend of the previous two quarters. In terms of profitability, the company demonstrated strong operating efficiency: Net profit: reached US$5.3 billion, up 5.2% year over year; net profit margin rose to 15.5% from 14.9% in the same period last year. Adjusted EBITDA: recorded US$13.8 billion, up 8.0% year over year, marking the company's highest quarterly record in history. Earnings per share (EPS): US$1.25, up 6.8% year over year; adjusted EPS was US$1.31, up 8.3% year over year. In terms of cash flow, Q3 operating cash flow reached US$11.5 billion, up 2.2% year over year; free cash flow reached US$7.8 billion, surging 12.1% year over year. Mobile and broadband businesses surge, churn rate hits record low Verizon CEO Dan Schulman said: "One year into the transformation, Verizon is fundamentally stronger operationally, financially and competitively. By prioritizing customer-first services such as 'Simplicity' and loyalty programs rather than relying on heavy subsidies, we are winning high-value loyal customers while expanding margins and reducing churn." User data confirms the success of this strategy: Postpaid phone users: net additions of 406,000, surging more than 820% year over year, the best third-quarter performance in five years. Postpaid accounts: net additions of 137,000, the best performance in more than a decade. Churn rate: postpaid phone churn improved 4 basis points year over year to 0.94%. Broadband business: net additions of 314,000 (including 159,000 fixed wireless users and 155,000 fiber users). Total broadband connections now stand at 17.4 million, with more than half of new fiber users choosing speeds of 1G and above. The company expects fiber coverage to exceed 32 million households by the end of this year. Partnering with AWS to push into AI infrastructure While its traditional telecom business grows steadily, Verizon is actively expanding its technology infrastructure footprint. The company announced a cooperation agreement with Amazon.com, Inc. Cloud Technology (AWS) valued at more than US$2 billion. The agreement establishes a commercial framework aimed at scaling distributed computing to meet the real-time demands of generative AI and agentic AI workloads. Schulman emphasized that tech giants are choosing Verizon's fiber network to power next-generation AI infrastructure, opening up new growth space for the company. Financial discipline pays off, full-year guidance raised for third consecutive quarter Based on strong Q3 performance, Verizon announced an upward revision to its full-year 2026 guidance, marking the company's third consecutive raise of key metrics this year: Postpaid phone net user additions: raised to 1.1 million to 1.2 million (previously forecast at the upper half of 750,000 to 1 million), which would represent more than triple the growth from 2025. Adjusted EPS: raised to US$5.04 to US$5.06 (up 7.0% to 7.5% year over year), compared with previous expectations of 6.0% to 7.0% growth. Free cash flow: expected to increase by close to 12.0% year over year (previously expected at 9.0% to 10.0%). Capital expenditure: maintained at between US$16 billion and US$16.5 billion, including success-based investments for AI Connect. In addition, the report mentioned that due to longer user device replacement cycles and the company's strategic decision to proactively cut device subsidies, Q3 equipment revenue fell 9.0% year over year. This reflects Verizon's evolution toward a more disciplined, structured business model. In terms of shareholder returns, the company returned US$12.8 billion in capital to shareholders in the first nine months of this year, up 49% year over year.