tapebrief
VZ · Q1 2026

VZ · Q2 2026 Earnings

Bullish

Verizon

Reported July 24, 2026

30-second summary

Verizon lifted FY2026 adjusted EPS guidance to $4.99–$5.04 (+6.0–7.0% YoY) from $4.95–$4.99 (+5.0–6.0%) — a second consecutive quarterly raise 180 days into Schulman's reset — and narrowed FY FCF growth to +9.0–10.0% from "approximately 7.0% or more." Q2 postpaid phone net adds of 184K came in below the ~294K run-rate the FY guide implied, but wireless retail postpaid churn improved 5bps to exactly the 0.92% threshold the prior watch list flagged, and management introduced a Q3→Q4 service revenue acceleration path (~3.0% → ~4.0%) that anchors the H2 story. Reported revenue of $34.25B (-0.7% YoY) missed consensus by 2.9% on wireless equipment weakness (-22.2% in Consumer), but service revenue mix is what management is asking investors to underwrite.

Headline numbers

EPS

Q2 FY2026

$1.30

+2.4% vs est.

Revenue

Q2 FY2026

$34.25B

-0.7% YoY

-2.9% vs est.

Free cash flow

Q2 FY2026

$6.43B

Operating margin

Q2 FY2026

20.9%

Key financials

Q2 FY2026
MetricQ2 FY2026Q2 FY2025YoYQ1 FY2026QoQ
Revenue$34.25B$34.50B-0.7%$34.44B-0.5%
EPS$1.30$1.22+6.6%$1.28+1.6%
Operating margin20.9%23.7%-280bps23.9%-305bps
Free cash flow$6.43B——$3.78B+69.9%

Guidance

Verizon raised full-year EPS guidance to $4.99–$5.04 (6–7% YoY growth) and FCF growth to 9–10% YoY, while narrowing and raising service revenue growth to 2.5–3.0% FY and introducing Q3/Q4 sequential acceleration to ~3.0% and ~4.0% respectively.

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

MetricPeriodPrior guideActualΔResult
Mobility and Broadband Service Revenue GrowthQ2 FY 20262.0% to 3.0% (implied from FY guidance)2.8%In-line, at the higher end of historical FY rangeMet

New guidance

MetricPeriodGuideYoY
Cash Flow from Operations GrowthFY 20262.0% to 4.0% year-over-year growth2.0% to 4.0% YoY
Mobility and Broadband Service Revenue GrowthQ3 FY 2026approximately 3.0% in Q3 FY2026~3.8-3.9% YoY
Mobility and Broadband Service Revenue GrowthQ4 FY 2026approximately 4.0% in Q4 FY2026—

Changes to prior guidance

MetricPeriodPrior guideNew guideΔResult
Adjusted EPS
FY 2026
$4.95 to $4.99 (5.0% to 6.0% YoY growth)$4.99 to $5.04 (6.0% to 7.0% YoY growth)+$0.04 at midpoint; +100 bps to YoY growth rangeRaised
Free Cash Flow Growth
FY 2026
approximately 7.0% or more year-over-year9.0% to 10.0% year-over-year+200 to +300 bps at low-to-mid rangeRaised

Reaffirmed unchanged this quarter: Mobility and Broadband Service Revenue Growth (2.5% to 3.0%), Capital Expenditures ($16.0 billion to $16.5 billion), Total Retail Postpaid Phone Net Additions (upper half of 750,000 to 1.0 million range)

Segment performance

Q2 FY2026
SegmentQ2 FY2026Q2 FY2025YoY
Consumer - Mobility and Broadband Service$19.637B—+3.3%
Business - Mobility and Broadband Service$3.728B—-0.1%
Consumer - Wireless Equipment$4.178B—-22.2%
Business - Wireless Equipment$0.846B—-4.5%

Platform metrics

Q2 FY2026
SegmentQ2 FY2026Q2 FY2025YoY
Postpaid Phone Net Additions (Q2)184,000——
Total Broadband Net Additions (Q2)348,000——
Fixed Wireless Access Connections6.2 million——
Fiber Broadband Connections10.9 million——
Wireless Retail Postpaid Churn0.92%——
Mobility and Broadband Service Revenue Growth2.8%——

Profitability

Q2 FY2026
SegmentQ2 FY2026Q2 FY2025YoY
Adjusted EBITDA Margin40.1%——
Free Cash Flow Growth (6M YoY)16.0%——

Management tone

Q3 2025 Schulman cost-transformation signal → Q4 2025 concrete $5B opex plan → Q1 2026 EPS raise + first positive Q1 postpaid phone since 2013 → Q2 2026 second EPS raise + churn-hits-target + AI-infrastructure-revenue emergence.

No transcript was made available for this quarter; the observations below are anchored on the Q2 2026 press release language and the cross-quarter arc from prior briefs.

Guidance-raise cadence has become the equity story. Two consecutive quarterly EPS raises inside the same fiscal-year framework — each moving both the dollar range and the YoY growth band at the midpoint — is an unusual posture for a mature telecom. The Q4 2025 framework opened at +4–5% YoY EPS growth against a prior five-year average of approximately -1%; six months later the same framework is at +6–7%. The signal is that Schulman is finding cost dollars faster than he telegraphed at the reset. The FCF narrowing to a 9–10% band from "7% or more" reinforces this — management is now willing to put a ceiling on FCF because they have confidence in the floor.

The churn thesis is now quantitatively validated. Skiadas's pre-Q1 math was explicit: 5bps of churn reduction delivers more than half the FY postpaid phone target. Q1 came in at 0.97% (up 2bps YoY, so the thesis was directionally unproven), and the prior watch list set 0.92% as the falsification threshold. Q2 printed exactly 0.92%. That is the cleanest evidence yet that the customer-first reset is producing measurable operational output, not just narrative.

A new growth vector — AI infrastructure revenue — enters the qualitative script. The press release qualitative statements now include "fundamentally reshaping Verizon's growth trajectory with emergence of AI infrastructure revenue." This is the first time AI infrastructure has appeared as a named revenue category in the Verizon framing under Schulman. No dollar figure was disclosed. The absence of quantification means investors should treat this as narrative scaffolding for now, but it warrants tracking — a named category with no numbers typically becomes a named category with numbers within two to three quarters when management is building an equity-story case.

Postpaid phone volume framing shifted from level to trajectory. Q4 2025 leaned on 616K Q4 phone net adds as the operational headline; Q1 leaned on "first positive Q1 since 2013"; Q2 at 184K is below the implied run-rate but management chose to reaffirm the upper-half FY range and lean instead on the churn improvement and the Q3→Q4 service revenue acceleration path. The pivot away from raw net-add levels toward churn + service revenue mix is either strategically coherent (service revenue is what actually drives EPS) or a soft acknowledgment that H2 needs to deliver ~500–600K additional net adds to hit the upper-half FY target.

Answers to last quarter's watch list

Q2 postpaid phone net adds vs. the ~294K implied run-rate — Q2 printed 184K, materially below the 294K midpoint cadence and below the >200K bar set in the prior watch list. YTD H1 postpaid phone net adds total ~239K vs. the FY upper-half implied ~875K–1.0M target, meaning H2 needs to deliver ~636K–761K net adds — a step-function acceleration. Management reaffirmed the FY range, but the arithmetic bar just got materially higher.
Resolved negatively
Whether postpaid phone churn improves further toward the 5bps target — Wireless retail postpaid churn came in at 0.92%, exactly the threshold flagged. This is the quantitative confirmation of the churn-led-growth thesis Skiadas articulated pre-Q1 and is the single cleanest positive data point in the release.
Resolved positively
FWA net adds trajectory after Q1's 214K — The press release discloses the cumulative FWA base at 6.2M and total broadband net adds of 348K, but does not separately disclose Q2 FWA net adds in the fields available here. Total broadband above 300K is directionally reassuring vs. the Q3 2025 (261K) and Q1 2026 (214K) sub-300K prints, but FWA-specific validation is not confirmable from the disclosed figures alone.
Continue monitoring
Whether Business revenue holds the +1.8% YoY positive turn — Business mobility & broadband service revenue printed -0.1% YoY, effectively flat. That is a narrowing vs. the -1.8% Q4 2025 Business segment print but a step down from the +1.8% Q1 2026 total Business revenue growth. The trajectory is directionally improving over the multi-quarter arc but the +1.8% Q1 turn was not held.
Continue monitoring
First reinstated FY2026 adjusted EBITDA disclosure or directional band — Q2 press release discloses Q2 adjusted EBITDA margin at 40.1% but does not reintroduce an FY2026 adjusted EBITDA dollar guide or growth band. Two consecutive quarters of silence on the EBITDA framework is now itself a disclosure choice — one that leaves EPS and FCF as the only quantified profitability anchors for the FY.
Not resolved
Fiber passings build-pace progress toward the 2.0M+ FY commitment — No interim fiber passings figure was disclosed in the fields available. Fiber broadband connections were reported at 10.9M cumulative. The FY2026 ≥2.0M passings commitment remains reaffirmed via silence but was not quantitatively updated.
Continue monitoring

What to watch into next quarter

Q3 postpaid phone net adds vs. the ~318–380K cadence H2 now requires — H1 delivered ~239K against an upper-half FY target of ~875K–1.0M; a Q3 print below 250K would put the FY range at genuine risk and force either a guidance revision or explicit management reconciliation.

Whether Q3 mobility & broadband service revenue growth actually prints at ~3.0% — the guide implies ~$34.83B on the $33.82B Q3 2025 base; any material undershoot compromises the Q3→Q4 acceleration story that anchors the raised FY EPS.

Whether churn holds at or below 0.92% — the Q2 print is the cleanest thesis validation of the reset; a reversion above 0.95% in Q3 would materially damage the churn-led-growth narrative.

First AI infrastructure revenue quantification, however preliminary — the qualitative introduction of AI infrastructure as a named category creates a disclosure expectation; a Q3 with continued absence of numbers would suggest the category is narrative rather than operational.

Whether the FY2026 adjusted EBITDA framework returns — three consecutive quarters of no EBITDA guide (Q4 2025, Q1 2026, Q2 2026) would harden into a permanent disclosure change and become a real credibility issue.

Consumer wireless equipment revenue trajectory — Q2's -22.2% YoY drove the consensus revenue miss; another sharp decline in Q3 without offset elsewhere would raise questions about upgrade cycle timing and its second-order impact on the service revenue mix story.

Sources

  1. Verizon Q2 2026 press release / 8-K exhibit, filed 2026-07-24: https://www.sec.gov/Archives/edgar/data/732712/000073271226000040/a2026q2exhibit99.htm
  2. Consensus estimates via Tradefeeds as of 2026-07-24.
  3. Prior Tapebrief coverage: Verizon Q1 2026 brief, Q4 2025 brief, Q3 2025 brief, Q2 2025 brief.

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