VZ Verizon Communications 10-Q 2026-09-30 section summaries

Verizon Q3 and first nine months of 2026

Verizon’s Q3 revenue and operating income grew year over year, supported by service revenue and segment gains. For the first nine months, revenue and segment operating income also increased, but consolidated operating income and net income declined as higher interest expense and significant charges—including severance, acquisition and integration costs, asset-rationalization charges, and a loss on a planned business disposition—offset operating gains.

Consolidated results

Amounts in billions, except per-share data and shares. Q3 and nine-month periods ended September 30.

Q3 operating revenue increased 1.45%; service revenue and other grew 3.53%, while wireless equipment revenue fell 8.95%. For 9M, revenue increased 1.17%, with service revenue and other up 3.13% and equipment revenue down 8.40%. Higher interest expense was a significant earnings headwind in both periods.

Q3 segment results

Business operating income grew faster than revenue: for 9M it was $2.802B versus $2.186B, a larger year-over-year growth rate than in Q3. The Q3 reconciliation from reportable segment operating income to consolidated operating income was:

For 9M, reconciliation included $397M of severance charges, $453M of acquisition and integration charges (versus $52M), $258M of asset-rationalization charges, and a $746M disposition loss.

Cash flow and capital allocation

Investing outflows included $9.480B of acquisition payments and $4.384B for wireless licenses. Financing outflows included $8.804B of dividends and $4.000B of share repurchases; there were no treasury-stock purchases in 9M 2025. The January 2026 authorization permits up to $25B in repurchases; Verizon bought back 82.431M shares for $4.0B, leaving $21.0B of capacity. Common shares were 4.291434B at both the beginning and end of the nine-month period, while treasury shares increased from 74.258M to 146.835M. Cash, cash equivalents and restricted cash fell to $5.064B from $19.499B at year-end 2025.

Balance sheet and debt

Other intangible assets comprise net customer lists of $3.383B, non-network internal-use software of $7.846B, and other intangibles of $773M. Equity less goodwill and other intangible assets implies negative tangible common equity of $96.856B. Debt excluding finance leases had a $162.381B carrying amount and $154.484B fair value at September 30, 2026. Asset-backed debt carrying value was $30.1B; these financings generally rely on pledged collateral, though Verizon has specified support and guarantee obligations. Verizon amended and extended its $12.0B revolving credit facility to 2030, with $11.929B unused; it reported compliance with debt covenants.

Acquisitions, financing and other developments

Verizon closed its Frontier acquisition on January 20 for preliminary purchase consideration of $9.931B, paid approximately $9.8B cash (including $335M cash acquired), and assumed $12.9B of debt at fair value ($12.7B principal). Frontier added $7.860B of goodwill, which is not tax deductible, and expanded Verizon’s fiber footprint to 31 states and Washington, D.C. Verizon repaid approximately $12.4B principal on Frontier-assumed debt during 9M; $219M principal remained at September 30. Acquisition and integration costs were $426M in 9M. Goodwill attributable to Frontier was allocated about $6.080B to Consumer and $1.808B to Business.

Verizon also paid $1.0B for selected UScellular spectrum licenses and $3.2B for 82 AWS-3 licenses; total license carrying value reached $161.417B. It issued debt with $12.064B net proceeds in 9M. Verizon recorded a $740M pretax loss in 9M to write down the international wireline connectivity and managed-network-services business planned for contribution to a 50/50 BT joint venture; the transaction remains subject to approvals. A separate wireless joint venture with AT&T and T-Mobile is intended to reduce coverage gaps.

Device-payment-plan receivables were $31.040B at amortized cost, including $1.510B allowance; 9M allowance activity included $900M provision, $1.069B write-offs and $51M recoveries. Verizon recorded $1.4B of severance payments in 9M, with $679M of severance liability remaining at September 30. Amortization expense was $2.615B in 9M versus $2.237B. Verizon reported 29 renewable-energy purchase agreements with fixed-price terms of 12–20 years; 22 associated facilities were operating.

Verizon (VZ) — Q3 and first nine months of 2026

Consolidated results

Revenue increased modestly, led by Consumer and Business. Q3 operating expenses were nearly flat, while 9M expenses rose 1.8%. Despite higher adjusted EBITDA, 9M net income declined. Interest expense rose as average debt increased to $167.321B in Q3 and $168.591B for 9M, from $146.578B and $145.154B, respectively. The effective interest rate was 5.0% for both 9M periods.

Segments

Consumer operating income grew 5.6%; its operating margin rose to 30.6% from 29.4%. Business revenue grew 2.6%, operating income 19.4%, and Segment EBITDA 13.0%; its operating margin improved to 12.2% from 10.5%. For 9M, Business operating income was $2.802B from $2.186B, and Segment EBITDA was $6.028B from $5.175B—growth of 28.2% and 16.5%, respectively. Consumer 9M operating income was $23.839B from $22.731B.

Consumer service growth included $700M more fiber broadband revenue, mainly from Frontier, while postpaid revenue fell $299M amid promotional-discount amortization and customer shifts. Wireless equipment revenue declined as device upgrades fell 22% in Q3; lower upgrade volumes also reduced equipment costs. Business growth came primarily from Other revenue, including Frontier legacy wireline; postpaid service revenue was weaker, partly offset by FWA and fiber growth. Across Verizon, cost of services increased with Frontier-related staffing and facilities, utility rates and digital-content costs. Higher depreciation also reflected Frontier-acquired assets. Lower advertising helped reduce SG&A in Q3.

Operating metrics

At September 30, total broadband connections were 17.437M, up from 13.065M a year earlier, including 11.068M fiber connections (7.674M prior year) and 6.369M FWA connections (5.391M). For 9M, postpaid phone net additions were 645K versus negative 254K, and fiber additions were 437K versus 138K; FWA additions declined to 566K from 847K.

Cash flow, investment and financing

Operating cash flow benefited from timing of cash tax payments following the One Big Beautiful Bill legislation and from working capital, partly offset by lower earnings. Verizon cautions that free cash flow is not discretionary cash available: it excludes, among other things, finance-lease payments, acquisitions and wireless-license purchases. Full-year 2026 capital expenditure guidance is $16.0B–$16.5B.

Investing cash outflow was $25.471B, versus $11.680B, reflecting acquisitions and spectrum purchases. Verizon acquired Frontier on January 20 for approximately $9.8B cash, including $335M cash acquired, and assumed approximately $12.9B of debt at fair value. The acquisition expanded its fiber footprint to 31 states and Washington, D.C. Verizon also paid $3.2B for Auction 113 licenses and $1.0B for UScellular spectrum licenses.

Financing cash outflow was $18.900B, versus $12.822B. Major 9M uses included $17.3B of long-term debt and finance-lease repayments, $14.3B of asset-backed debt repayments, $8.8B of dividends and $4.0B of share repurchases; borrowing proceeds partly offset the outflows. Total debt was $166.2B at September 30, up from $158.2B at year-end 2025. Cash and cash equivalents were $4.5B, down $14.6B from year-end. Verizon repurchased 82.4M shares for $4.0B under its $25B authorization, leaving $21.0B. Its amended $12.0B revolving facility matures in 2030 and was undrawn; Verizon reported covenant compliance and said funding should cover needs over the next 12 months and beyond.

Strategic transactions and risks

Verizon and BT agreed to form a 50/50 joint venture: Verizon plans to contribute the Verizon Contributed Business and $625M cash, while BT contributes its international connectivity and managed-network business. Closing depends on regulatory approvals and other conditions. Verizon also agreed with AT&T and T-Mobile to form a satellite-coverage venture intended to address U.S. wireless dead zones.

The held-for-sale classification of the Contributed Business resulted in a disposition loss described as $740M in the SG&A discussion and $746M in the special-items reconciliation. Other 9M special items included $397M severance, $453M acquisition and integration costs, $258M asset-rationalization charges and $803M acquisition-related intangible amortization; a $237M pension/postretirement remeasurement gain partly offset expenses.

Key exposures include substantial debt and higher interest costs, competitive pricing and customer preferences, cyber and network disruption, regulatory and litigation matters, macroeconomic uncertainty, and execution risk around acquisitions and expected synergies. Verizon also notes that it may not realize transaction-related cost savings or other benefits on schedule—or at all.

Item 3 provides no separate market-risk figures or disclosures. It directs readers to Item 2, MD&A, under “Market Risk.”

Controls and Procedures

Verizon’s CEO and CFO concluded that disclosure controls and procedures were effective as of September 30, 2026. No changes to internal control over financial reporting during Q3 2026 materially affected, or were reasonably likely to materially affect, those controls. This section reported no financial results, business developments, or additional risks.

Verizon reported no material changes to the risk factors previously disclosed in Part I, Item 1A of its Form 10-K for the year ended December 31, 2025. This section presents no new financial metrics, business developments, or industry-specific risks.

For the three months ended September 30, 2026, no directors or officers adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement. The section reports no financial or business developments.