Verizon Communications reported third-quarter results on Monday that showed a sharp recovery in wireless customer growth alongside a new commercial partnership with Amazon Web Services valued at more than $2 billion. The company raised its 2026 financial targets for the third straight quarter even as total revenue came in below Wall Street expectations.

Shares initially advanced about 2.4 percent in premarket trading before reversing and declining approximately 2.5 percent in early regular-session activity as investors focused on the revenue shortfall and broader competitive pressures in the wireless market.

Subscriber Growth Leads Quarterly Results

Verizon added 406,000 postpaid phone customers in the three months ended September 30. The figure marked the strongest third-quarter performance in five years and represented an increase of more than 820 percent from the 44,000 additions recorded in the same period a year earlier. Analyst estimates had centered near 209,000 additions.

The company also recorded 137,000 postpaid account additions, its best result in more than a decade, and 314,000 broadband net additions. Postpaid phone churn improved by four basis points to 0.94 percent.

Revenue rose 1.5 percent year over year to $34.3 billion but fell short of the approximately $34.74 billion consensus. Adjusted earnings per share reached $1.31, exceeding the $1.27 estimate. Adjusted EBITDA climbed 8 percent to a record $13.8 billion. Free cash flow increased 12.1 percent to $7.8 billion.

Wireless equipment revenue declined 9 percent as customers retained devices longer and the company reduced device subsidies. Management indicated the trend is expected to continue into the fourth quarter.

Full-Year Guidance Increased Again

Verizon lifted its 2026 outlook across several metrics. The company now projects postpaid phone net additions of 1.1 million to 1.2 million, up from the previous range of 750,000 to 1 million. Adjusted earnings per share are forecast at $5.04 to $5.06, compared with the prior range of $4.99 to $5.04. Free cash flow growth is expected to approach 12 percent, higher than the earlier projection of 9 percent to 10 percent.

Fiber passings are expected to exceed 32 million by year-end, with a medium-term goal of 40 million to 50 million.

AWS Partnership Expands AI Connectivity Business

Alongside the earnings release, Verizon announced a commercial framework agreement with Amazon Web Services valued at more than $2 billion. The deal centers on high-capacity fiber connectivity that supports distributed computing for generative and agentic AI workloads. The arrangement enables faster and more reliable data transfers between computing facilities.

The AWS agreement follows a separate partnership with Google, valued at more than $1 billion, focused on connecting data centers with dark fiber. Verizon has indicated it is in discussions with additional hyperscalers, neocloud providers and large enterprise customers for similar fiber and edge-computing services.

Chief Executive Dan Schulman stated that customer demand for dark fiber, lit fiber and edge compute locations remains strong and represents a significant growth opportunity. The company has signed contracts totaling approximately $4 billion in this area, with meaningful revenue contribution expected to begin in 2027. Capital spending related to the AI connectivity business is described as modest and already incorporated into the existing 2026 capital expenditure guidance of $16.0 billion to $16.5 billion.

Competitive Backdrop and Network Positioning

Verizon continues to face intensifying competition in the wireless market. Recent developments involving SpaceX and its Starlink service have raised questions about potential future pressure on traditional mobile operators. Schulman noted that building a comparable terrestrial network would require four to six years and an investment of $300 billion to $500 billion, underscoring the scale of Verizon’s existing infrastructure.

The company has pursued operational changes under Schulman’s leadership, including simplified pricing plans introduced earlier in the year. Those efforts appear to be supporting the rebound in postpaid additions while the firm expands into AI-related connectivity services as a complementary revenue stream.

Overall, the combination of stronger subscriber metrics, higher profitability measures and multi-billion-dollar infrastructure partnerships with major cloud providers forms the basis for the latest upward revision in Verizon’s 2026 forecasts.