Verizon Announces Deal Worth More Than $2 Billion With AWS, Adds 406,000 Subscribers
Key Facts
Verizon announced on October 26 an agreement with Amazon Web Services worth more than $2.0 billion to establish a commercial framework expanding distributed computing to meet the real-time needs of generative and agentic AI workloads. The announcement coincided with third-quarter results showing a net addition of 406,000 postpaid phone subscribers, above Visible Alpha’s forecast of 209,439. The company said additions rose more than 820% year over year, marking its strongest third-quarter performance in five years. Operating revenue, meanwhile, was $34.3 billion, below analysts’ estimate of $34.74 billion, according to LSEG data cited by Reuters. Verizon shares rose 2.4% in premarket trading on the day of the announcement, Reuters reported.
Revenue from mobility and broadband services was $23.5 billion, up 2.9% year over year in the third quarter. Growth in this revenue continued to improve from increases of 2.8% in the second quarter and 1.6% in the first quarter of 2026. But services growth was offset by a 9.0% year-over-year decline in equipment revenue, Verizon said. The company attributed the weakness in equipment revenue to fewer phone upgrades, customers keeping their devices longer and reduced device subsidies. Total operating revenue was $34.3 billion, up 1.5% year over year.
In customer accounts, Verizon added a net 137,000 postpaid accounts, its strongest quarterly performance in more than a decade. It also recorded 314,000 net broadband additions, comprising 159,000 fixed wireless access connections and 155,000 fiber connections. The figures reflect an expansion in home connectivity services alongside growth in the phone subscriber base. The company is targeting more than 32 million fiber passings by the end of 2026. That goal is part of a medium-term plan to reach between 40 and 50 million passings, according to its announcement.
Adjusted earnings per share, excluding special items, were $1.31 in the third quarter, up 8.3% from $1.21 in the same period of 2025. Cash flow from operating activities was $11.5 billion, while free cash flow reached $7.8 billion during the quarter. The company said operating cash flow supported that level of free cash flow. Alongside its quarterly results, Verizon raised its forecast for 2026 free cash flow growth to nearly 12% year over year, from a previous range of 9% to 10%. It also expects capital expenditure of between $16.0 billion and $16.5 billion for the year, including demand-related investments in AI Connect.
Verizon raised its 2026 forecast for postpaid phone subscriber additions to between 1.1 million and 1.2 million, from its previous expectation of reaching the upper half of a range of 750,000 to 1 million subscribers. It also raised its adjusted earnings per share forecast for the year to between $5.04 and $5.06, compared with a previous range of $4.99 to $5.04, according to Reuters. The revised forecasts link subscriber acquisition performance with the improvement in cash flow announced by the company. As part of its expansion of infrastructure needed to connect data centers, Verizon announced an agreement worth more than $1 billion with Google in July to connect data centers using dark fiber. The new agreement with AWS also establishes a commercial framework to expand distributed computing, without the public announcement specifying implementation details or a timeline.
Verizon and AWS’s fiber collaboration builds on an agreement announced by the companies in November 2025 to build long-haul, high-capacity routes reaching AWS data center locations. Verizon said at the time that the routes were intended to provide resilient, low-latency connectivity to support AI applications. The collaboration also included AWS’s designation as a preferred strategic public cloud provider, alongside the development of private mobile edge computing solutions for enterprise customers. In September 2026, Verizon announced a fiber supply agreement with Corning running from 2027 to 2032, to provide more than 80 million miles of high-density optical fiber and related connectivity solutions. These agreements place the new AWS deal within the company’s broader expansion in fiber and data center connectivity, while its 2026 outlook remains the near-term focus for investors.