Verizon Communications has raised its full-year earnings outlook for the third consecutive quarter, buoyed by strong customer growth in its post-paid phone segment and expanding agreements related to artificial intelligence infrastructure.
On Monday, the telecommunications company announced it had secured a contract valued at over $2 billion with Amazon Web Services to provide dark fibre connectivity for AI workloads. This deal follows a similar agreement earlier this year with Alphabet’s Google, which was worth more than $1 billion. Chief Executive Dan Schulman described these contracts as evidence that leading builders of AI infrastructure are selecting Verizon as a strategic partner for connectivity.
Verizon reported a net gain of 406,000 post-paid phone connections in the third quarter, the strongest quarterly performance in five years and well above analysts’ expectations of 195,300 additions. This growth reflects a shift in Verizon’s customer acquisition strategy, emphasizing attracting loyal and high-value customers through initiatives like its expanded loyalty program and the Simplicity plan introduced earlier this year, rather than relying on heavy subsidies.
“We are not buying customers. We are winning them on revenue-positive terms and keeping them longer,” Schulman said during a call with analysts. The surge in post-paid subscribers contributed to higher revenue and profit for Verizon in the quarter.
Verizon posted net income of $5.3 billion, or $1.25 per share, for the third quarter, up from $5.06 billion, or $1.17 per share, a year earlier. Adjusted earnings per share were $1.31, surpassing analyst expectations of $1.27.
Schulman, who assumed the CEO role in October last year, said the latest results demonstrate Verizon’s progress in transforming into a structurally different company. “Verizon is in a fundamentally better position operationally, financially and competitively,” he said.
In response to the improved results, Verizon now projects adjusted earnings per share between $5.04 and $5.06 for the full year, up from its prior estimate of $4.99 to $5.04. The company also raised its forecast for total post-paid phone net additions to between 1.1 million and 1.2 million, compared with an earlier range of 875,000 to 1 million. Additionally, Verizon expects mobility and broadband service revenue growth to be in the upper half of its previous forecast of 2.5% to 3.5% for the year.
Looking ahead, Schulman noted ongoing discussions with other major hyperscalers, neocloud providers, and large enterprise clients to expand fibre connectivity services. The company is also seeing increased interest from partners aiming to leverage Verizon’s network hubs for AI inference and edge computing applications.