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**ALEX:** Welcome to Beta Finch, your AI-powered earnings breakdown! I'm Alex, joined as always by Jordan, and today we're diving into Verizon's third quarter 2026 results. And Jordan, I'll just say upfront — this is not the Verizon we've been talking about for the last few years.
**JORDAN:** Yeah, this one's a bit of a head-turner. There's a real turnaround story happening here.
**ALEX:** Before we get into it, quick disclaimer: this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.
**JORDAN:** Good to get that out of the way, because there's a lot to unpack here.
**ALEX:** There really is. Let's start with the headline number that jumped out at me: postpaid phone net additions were up 820% year-over-year — 406,000 new phone lines, their best Q3 in five years.
**JORDAN:** That number is wild on its own, but what really caught my attention was the account growth — 137,000 net account additions, the best quarterly performance in over a decade. That's a different kind of growth than just phone lines.
**ALEX:** Right, and CEO Dan Schulman was very clear about why that distinction matters. He basically said, "I don't consider free lines to even be net adds — I think they're churn waiting to happen." Verizon didn't buy this growth with freebies and heavy subsidies.
**JORDAN:** That's the real story here. Cost of acquisition was down 41% year-over-year, cost of retention down 30%. So they're growing faster AND spending less to do it. That's the kind of operating leverage that shows up directly in margins.
**ALEX:** And it did — adjusted EBITDA margin hit 40.2%, up 240 basis points year-over-year, a record for the company. Adjusted EPS came in at $1.31, up 8.3%.
**JORDAN:** And they raised guidance across the board. Full-year EPS growth guidance moved up to 7% to 7.5% from 6% to 7%. Free cash flow guidance jumped to "approach 12%" growth, up from 9-10%. And they're now expecting $7.8 billion in quarterly free cash flow — their best quarter since 2020.
**ALEX:** Postpaid phone net adds guidance for the full year also moved up to 1.1 to 1.2 million, more than triple what they did last year. This is a company that's been raising the bar every single quarter for the past year.
**JORDAN:** Let's talk strategy, because there were two things in this call that I think investors should really pay attention to beyond the quarterly numbers. First: AI Connect.
**ALEX:** Yes! This is Verizon's play into AI infrastructure — selling dark fiber and edge computing capacity to hyperscalers. They announced a new agreement with Amazon Web Services worth over $2 billion, building on a Google deal from last quarter. All told, they've got about $4 billion in signed long-term contracts now.
**JORDAN:** And what's interesting is the margin profile — these are described as high-margin, long-duration contracts with modest, success-based capital requirements. Dan Schulman called it a "rapidly growing TAM" — total addressable market — and said this starts hitting the P&L meaningfully in 2027, not this year.
**ALEX:** So it's a 2027 story, but the groundwork is clearly being laid now. The other big strategic nugget was this millimeter wave spectrum pivot for fixed wireless broadband.
**JORDAN:** This one surprised me. Verizon has roughly 1,700 megahertz of millimeter wave spectrum that's been sitting around underutilized, and they've found a way to use it to deliver gigabit-speed fixed wireless broadband in metro areas — as a cheaper alternative to digging up streets for fiber.
**ALEX:** Schulman was pretty blunt about the philosophy shift here too. He said if a customer needs a gig of speed and they can only offer 300 megabits, they shouldn't sell it at all — even if that costs them a net add i
This episode includes AI-generated content.
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2026/10/287 分