Verizon Communications (VZ) — Q2 2026 Earnings Preview

Earnings Date: July 24, 2026 (Pre-Market) Prepared: July 23, 2026 Reporting Period: Q2 2026

1. Earnings Preview

Key Takeaway: The setup is constructive but not a slam dunk — consensus has modestly drifted lower since Q1 earnings, the bar on postpaid net adds is achievable given Q1 momentum and peer read-throughs, but the BT JV loss charge ($700–800M) and severance/asset charges ($550–750M combined) will cloud reported EBITDA and require careful adjusted vs. reported parsing. The biggest swing factor is whether churn continued its Q1 exit-rate improvement into Q2.

VZ heads into Q2 2026 earnings with a turnaround narrative that is gaining credibility but still in early innings. Consensus EPS of $1.26 sits slightly below the $1.28 post-Q1 baseline, reflecting modest downward drift as one-time charges (BT JV loss, severance, asset rationalization) weigh on reported figures — though adjusted EPS should be cleaner. The bar on postpaid phone net adds (~112K consensus) looks achievable: VZ exited Q1 with consumer churn at 85bps and management explicitly flagged continued Q2 momentum; AT&T's strong Q2 print (432K net adds) and T-Mobile's solid 277K suggest a healthy industry backdrop. The stock is down ~7% since Q1 earnings vs. XLC down ~9%, meaning VZ has actually outperformed its sector on a relative basis despite the absolute decline — the stock has largely de-rated with the sector rather than on company-specific concerns. The wildcard is the pace of ARPA recovery: management guided for price-lapping and promo amortization tailwinds to begin as early as Q3, and any pull-forward of that inflection into Q2 commentary would be a positive catalyst.

2. KPIs & Consensus Expectations

Key Takeaway: The bar is achievable on the key subscriber metrics; EPS consensus has drifted slightly lower since Q1 earnings, creating a modest cushion. Postpaid net adds and churn are the bigger swing factors vs. revenue.

Table 1 — Current Quarter Snapshot (Q2 2026)

* Q1 2026 broadband net adds include ~3.1M acquired Frontier subscribers (one-time). Organic broadband net adds in Q1 were ~230K.

Table 2 — Beat/Miss History (Last 8 Quarters, Top 2 KPIs)

Pattern: VZ has beaten EPS in 6 of the last 8 quarters, with the beats accelerating in magnitude under new CEO Schulman. Postpaid net adds have been more volatile — consistent misses through mid-2025 before a sharp reversal in Q4 2025 and Q1 2026 as the turnaround gained traction.

3. Guidance & Commentary Evolution

Key Takeaway: No formal guidance revision since Q1 earnings; management tone at May conferences was incrementally positive, with CEO Schulman calling the turnaround "probably gaining momentum." The BT JV announcement (June 28) is the only material post-earnings development affecting reported financials.

4. Guidance vs. Estimate Revision Tracker

Key Takeaway: Estimates have drifted modestly lower since Q1 earnings on one-time charge noise, but the FY trajectory is essentially unchanged — the turnaround thesis is intact. The gap between current consensus and guidance midpoints is tight, suggesting limited cushion if execution slips.

The most notable drift is in Q2 postpaid net adds (-8.9% from the post-Q1 baseline), likely reflecting conservatism around the BT JV noise and one-time charges. EPS and revenue estimates are essentially flat. The FY free cash flow consensus of $21.77B sits above the $21.5B+ guidance floor, suggesting the Street is giving credit to the efficiency story.

5. Stock Performance

Key Takeaway: VZ has outperformed its sector (XLC) since Q1 earnings but lagged the broad market (SPY). The stock's decline is largely sector-driven rather than company-specific — the turnaround narrative has held, but Communication Services broadly de-rated. The BT JV announcement (June 28) and retail store divestiture news (July 16) created short-term volatility but did not break the trend.

VZ vs XLC (Communication Services ETF) vs S&P 500 — Indexed to 100 at Q1 2026 Earnings (Apr 27, 2026). Source: Stock Price Data.

• May 13–18: Conference circuit (Moffett Nathanson & JPM TMT) — CEO Schulman bullish, called turnaround "probably gaining momentum." Stock held near post-earnings levels.
• June 17: BT JV debt exchange filing — minor negative reaction as market digested the transaction structure.
• June 28: BT JV agreement announced — $700–800M estimated Q2 loss disclosed; stock sold off ~3% on the day as investors parsed the one-time charge.
• July 16: Retail store divestiture / ~3,000 layoffs announced — stock recovered modestly as the market viewed this as consistent with the $5B OpEx savings target.

6. Material News & Developments

Key Takeaway: The BT JV (announced June 28) is the most material post-earnings development — it will create a one-time loss in Q2 reported results but is accretive to Business Group EBITDA on an adjusted basis. The retail store divestiture and layoffs (July 16) reinforce the $5B OpEx savings trajectory.

• June 28, 2026 — BT Group Joint Venture: VZ entered a 50/50 JV with BT Group, contributing its international wireline connectivity and managed network services business. VZ will make a $625M cash payment to BT. The transaction will result in an estimated $700–800M loss in Q2 2026 reported results due to reclassification as assets held for sale. However, the transaction is accretive to Verizon Business Group EBITDA as the contributed business moves to Corporate and Other. Regulatory approvals pending. Implication: Reported Q2 EBITDA will be depressed; adjusted EBITDA should be cleaner. Watch for management commentary on the strategic rationale and timeline.
• July 16, 2026 — Retail Store Divestiture & Layoffs: VZ announced plans to divest 274 corporate-owned retail stores to franchise owners, retaining ~1,000 stores. This will result in ~3,000 layoffs (~2,500 from store divestiture, ~500 corporate). Implication: Reinforces the $5B OpEx savings target; management may quantify the annualized savings contribution on the call.
• June 29, 2026 — Q2 Pre-Announcement (8-K): VZ disclosed expected Q2 charges: severance of $350–450M and asset rationalization charges of $200–300M. These are non-recurring transformation costs. Implication: Adjusted EPS should strip these out; watch for the adjusted vs. reported reconciliation.
• May 14, 2026 — $4B Junior Subordinated Notes Offering: VZ raised $4B through junior subordinated notes, likely to fund Frontier debt paydown (management guided to repay substantially all Frontier debt by year-end). Implication: Leverage trajectory on track; watch for updated net debt/EBITDA commentary.
• May 13–18, 2026 — Conference Circuit (Moffett Nathanson & JPM TMT): CEO Schulman reiterated turnaround confidence, flagged churn exiting Q1 at 85bps, and described the transformation as "a bit further ahead than expected." No formal guidance revision. Implication: Management tone heading into Q2 was constructive.
• July 24, 2026 — Earnings Date: VZ reports Q2 2026 before market open. Consensus EPS: $1.26; Consensus Revenue: $35.29B.

7. Peer Commentaries — Q2 2026 Read-Throughs

Key Takeaway: Both AT&T and T-Mobile reported strong Q2 2026 results with positive read-throughs for VZ — industry churn is settling, promotional intensity has stabilized, and broadband demand remains robust. The competitive environment is rational, which supports VZ's strategy of reducing promotional spend while growing net adds through churn improvement.

Note: All commentary below is from Q2 2026 earnings calls (AT&T reported July 22, T-Mobile reported July 23) and Q2-focused conference commentary (Evercore TMT June 2, Mizuho June 9). Only forward-looking or current-quarter commentary is included.

AT&T (T) — Q2 2026 Earnings (Reported July 22, 2026)

• Postpaid Phone Net Adds: AT&T added 432,000 postpaid phone net adds in Q2 2026, its best result in more than three years for new consumer postpaid wireless accounts (147K new accounts). Growth is "increasingly driven by new accounts and not simply additional lines of service." Read-through: Strong industry demand for postpaid wireless; VZ's ~112K consensus looks achievable in this environment.
• Churn Settling: AT&T noted that "churn seems to be settling down both for you as you forecast at the beginning of the year and also seemingly for the industry after accelerating in 2025." Management also noted that "less device upgrading activity generally helps to reduce churn." Read-through: Directly positive for VZ's churn improvement thesis — industry-wide churn normalization supports VZ's guided trajectory.
• Wireless Service Revenue: AT&T wireless service revenues grew 3.3% YoY, driven by customer base growth and pricing actions. Read-through: Healthy industry revenue growth; VZ's guided 2–3% growth looks conservative by comparison.
• Promotional Environment: AT&T noted promotional activity "stepped up a bit" from last year but has "stabilized" as players rationally assess LTVs. Read-through: Rational competitive environment supports VZ's strategy of reducing cost of acquisition and retention.
• Convergence: AT&T's converged customers show "lower churn, outstanding brand affinity, higher lifetime values." AT&T expects convergence to "drive continued strong net additions in advanced home internet and postpaid phone subscribers during Q3." Read-through: Validates VZ's convergence strategy; VZ's 55% wireless attachment rate for broadband customers is best-in-industry.
• Device Costs: AT&T flagged rising device costs (Apple indications + memory costs), expecting "prices are going to go up and demand will probably be suppressed in some way." Read-through: Higher device prices could reduce upgrade activity, which AT&T noted "oftentimes helps on churn" — a secondary positive for VZ's churn improvement.
• AI Traffic: AT&T highlighted that "Agentic AI is fundamentally reshaping network traffic" with AI agents generating "up to 450% more total traffic per task than a human," projecting 9x enterprise and 7x consumer traffic growth by 2035. Read-through: Validates VZ's AI infrastructure monetization thesis and the long-term value of its fiber and 5G assets.

T-Mobile (TMUS) — Q2 2026 Earnings (Reported July 23, 2026)

• Postpaid Phone Net Adds: T-Mobile reported 277,000 postpaid net additions in Q2 2026, with postpaid service revenue up 13% YoY. CEO described it as "another extraordinary quarter." Read-through: T-Mobile continues to take share, but the strong industry backdrop (healthy demand, rational pricing) is a positive read-through for VZ.
• Churn: T-Mobile's postpaid phone churn was 0.85% in Q2 2026, "down year over year significantly." Read-through: T-Mobile's churn at 0.85% is exactly where VZ exited Q1 — if VZ maintained or improved from that level, it would be a meaningful positive.
• ARPA Growth: T-Mobile's postpaid ARPA grew 3.7% YoY (ex-M&A) in Q2, with CFO guiding "probably going to be more towards the 3% ARPA growth for the full year." Port-in ARPUs exceeded port-out ARPUs by ~20%. Read-through: Premium customers are choosing to pay more for quality networks — supports VZ's value-based pricing strategy and ARPA recovery thesis.
• Promotional Discipline: T-Mobile stated its "intention is not to increase our subsidy levels" even as device prices rise, aiming to "broaden out the reasons why people should choose T-Mobile rather than purely a free phone." Read-through: Industry-wide move away from free-phone promotions is a structural tailwind for VZ's cost of acquisition reduction.
• Broadband: T-Mobile reported broadband net adds "right in the upper 400,000 range" in Q2, with 5G broadband described as "the most exciting evolution in broadband technology in a long, long time." Read-through: Strong broadband demand environment; VZ's ~230K consensus broadband net adds looks achievable.
• Rate Plan Modernization: T-Mobile flagged that Q3 will see "temporary elevated account churn" from rate plan modernization, expecting ~250K net postpaid account additions in Q3. Read-through: T-Mobile's Q3 headwind is company-specific; VZ does not face the same dynamic and may benefit from switchers.
• Competitive Dynamics: T-Mobile noted that even "in places where our competitors have fiber and are building fiber, our share of postpaid continues to grow." Read-through: VZ's fiber/convergence strategy is not deterring T-Mobile's growth, but the overall market is large enough for multiple winners.

T-Mobile CFO at Evercore TMT Conference (June 2, 2026) — Q2 Forward-Looking Commentary

• Q2 ARPA Outlook: T-Mobile CFO guided Q2 ARPA growth of "roughly 2%" before "reaccelerating in the back half and landing at 2.5–3% for the full year." Read-through: ARPA growth is a Q2 industry-wide soft spot before re-accelerating — consistent with VZ's own guided trajectory.
• Competitive Behavior: T-Mobile noted some competitors were "going out there with pretty aggressive device-centric promotions" in Q1 that T-Mobile chose not to match as "CLV not attractive." Read-through: Suggests VZ's Q1 promotional discipline was industry-consistent; the rational competitive environment should persist into Q2.
• Industry Trend: T-Mobile flagged that "more prepaid customers are choosing to interact with postpaid brands directly than they have in the past" as an industry trend. Read-through: Prepaid-to-postpaid migration is a tailwind for VZ's postpaid net adds.

AT&T CFO at Mizuho Technology Conference (June 9, 2026) — Q2 Forward-Looking Commentary

• Broadband Acceleration: AT&T CFO stated "we expect growth in customer additions to accelerate year-over-year relative to what we saw in the first quarter" for Advanced Home Internet. Read-through: Broadband demand is accelerating into Q2 — positive for VZ's broadband net adds trajectory.
• Convergence Strategy: AT&T's converged customers (fiber + wireless) are "lowest churn customers, highest lifetime value." AT&T is targeting "value customers, 1 or 2 line customers" to expand market share. Read-through: AT&T's convergence push validates VZ's strategy; VZ's 30% lower churn on converged offers is a structural advantage.
• Promotional Discipline: AT&T CFO acknowledged the industry "probably as an industry, have over-indexed on those [device subsidies]" and manages within a "budget of subsidy." Read-through: Industry-wide acknowledgment of over-promotion supports VZ's move to reduce promotional intensity.

8. Insider Transaction Activity

Key Takeaway: All insider activity since Q1 earnings consists of routine phantom stock unit accruals under deferred compensation plans — no open-market buys or sells with one exception. Samantha Hammock (EVP & Chief HR Officer) sold 73,069 shares on May 29, 2026 (filed June 2) — a discretionary sale with no 10b5-1 plan flagged. The timing (pre-BT JV announcement) and the role (HR, not operational) limit the read-through, but it is the only open-market sale in the period.

Conclusion: The absence of open-market buying by insiders despite the stock's ~7% decline since Q1 earnings is notable but not alarming — the CEO is relatively new (7 months in role) and the deferred compensation accruals suggest ongoing alignment with shareholders through the plan structure. The single discretionary sale by the HR chief is not a meaningful negative signal.