Abstract
Verizon Communications Inc. will release second-quarter 2026 results on July 24, 2026 Pre-MKt; this preview summarizes consensus revenue, earnings, margins, segment trends, and the company-specific catalysts likely to shape investor reaction on the day.
Market Forecast
Consensus points to second-quarter revenue of 35.19 billion US dollars, up 4.31% year over year, with adjusted EPS at 1.27, up 6.96% year over year; EBIT is projected at 8.61 billion US dollars, up 5.83% year over year. Forecasts for gross margin and net margin are not explicitly provided in current-quarter estimates.
The main revenue mix remains anchored by service, with last quarter’s “services and other” contributing 28.76 billion US dollars (83.50% of revenue) and wireless equipment and devices contributing 5.68 billion US dollars (16.50% of revenue); the revenue mix and recent pricing and loyalty initiatives suggest stable service monetization into the quarter. The most promising area is core service revenue at 28.76 billion US dollars last quarter, and with total revenue projected to rise 4.31% year over year in the second quarter, connected-car wins and enterprise solutions are positioned to help service revenue outpace the consolidated growth rate over time.
Last Quarter Review
In the first quarter of 2026, Verizon Communications Inc. delivered revenue of 34.44 billion US dollars (up 2.85% year over year), a gross margin of 60.30%, net profit attributable to common shareholders of 5.05 billion US dollars and a net margin of 14.65%, with adjusted EPS of 1.28 (up 7.56% year over year).
One notable highlight was profitability: EBIT reached 8.74 billion US dollars, exceeding the quarter’s estimate by approximately 0.39 billion US dollars, while adjusted EPS exceeded consensus by about 0.08, reflecting cost discipline and a healthier mix in the period. By business line, “services and other” generated 28.76 billion US dollars (83.50% of revenue) and wireless equipment and devices contributed 5.68 billion US dollars (16.50% of revenue), with consolidated revenue up 2.85% year over year.
Current Quarter Outlook
Core service revenue momentum
The quarter’s financial tone is likely to be set by service monetization across consumer and enterprise lines. The company exited the prior quarter with a 60.30% gross margin and a 14.65% net margin, which sets a favorable base for the second quarter’s service profitability if device volumes stay rational and upgrade activity remains steady. Consensus now embeds adjusted EPS growth of 6.96% year over year on revenue growth of 4.31%, a spread that implies ongoing operating leverage from mix and cost programs. Management’s recent launch of a loyalty program alongside refreshed plan constructs is designed to support average revenue per account and retention, which, if reflected in churn and account-level monetization metrics, can underpin the earnings trajectory the market is expecting. While the quarter will also reflect typical promotional dynamics tied to midyear retail calendars, current expectations suggest an emphasis on yield management over pure unit growth, favoring margin stability.
Emerging growth engines: enterprise IoT and connected vehicles
The collaboration with KDDI to serve BMW Group’s U.S. production vehicles establishes a notable connected-car footprint that enhances the visibility of enterprise IoT and telematics revenue over time. Under the arrangement, Verizon provides 5G Standalone and LTE coverage on its U.S. network while KDDI supplies a global communications platform, enabling ConnectedDrive and a suite of infotainment and remote services for BMW and MINI vehicles. Financial terms were not disclosed, and the immediate quarterly revenue contribution is not expected to be material; nonetheless, the program validates the capability stack and opens a lane for additional North American auto OEM and fleet opportunities, with a potential positive mix effect given the typically service-heavy nature of connected-vehicle monetization. With consolidated revenue forecast to grow 4.31% year over year this quarter, execution on connected devices and enterprise solutions can help sustain above-company growth rates within this emerging stream across subsequent periods, supporting EBIT resilience as 5G use-cases scale.
Event-driven items and what will sway the stock on the day
Three discrete factors appear most likely to influence the stock’s reaction around the print. First, the joint venture announced with BT to consolidate international enterprise operations is expected to trigger a second-quarter accounting loss of approximately 0.70–0.80 billion US dollars tied to asset reclassification and transaction economics. While non-cash or transitional in substance, this item will depress GAAP earnings optics in the quarter; investors will focus on management’s adjusted framing and commentary on how the JV sharpens the focus on core profitability. Second, capital allocation and operating discipline will be under a microscope in light of ongoing cost actions and reported plans for additional workforce reductions; investors will look for quantitative color on second-half run-rate savings, the cadence of any restructuring costs, and whether the company reiterates or raises full-year targets for adjusted metrics and free cash flow. Third, index-related technicals and stock microstructure have been topical after recent benchmark reshuffling that affected passive flows; while this does not change operating performance, management’s narrative on subscriber quality, pricing elasticity, device financing policy updates, and any color on mid-cycle device trends will help frame how sustainable the 6.96% expected EPS growth is into the second half.
Device ecosystem, financing policy, and service economics
Changes to device financing and unlocking policies in the ecosystem have implications for churn, fraud, and subsidy economics. Tighter unlocking windows from ecosystem partners, combined with the company’s loyalty and family-focused device initiatives such as the newly launched Gizmo Watch 4, point to a subtle shift toward protecting lifetime value per account rather than maximizing short-term unit sales. If this translates into lower promotional intensity and fewer subsidy-driven disconnects, it can reinforce service margin stability in the quarter and beyond. The balance to watch is whether such measures affect upgrade cycles; early indications from the prior quarter’s mix and margin outcomes suggest the trade-off is manageable. For the second quarter, a steady equipment revenue contribution of 5.68 billion US dollars last quarter serves as a reasonable directional anchor, provided retail traffic and upgrade intent remain consistent with seasonal norms.
Enterprise refocus and revenue reporting changes
The company has revised reporting for consumer and business lines to emphasize consolidated disclosures, which shifts the way investors triangulate performance. In practice, this increases the importance of consolidated KPIs such as service revenue growth, cash costs, and adjusted EBIT trends to assess execution rather than relying on fine-grained segment unit metrics. In the context of the BT joint venture, investors will likely look for commentary on the pace of client migrations, one-off integration and separation costs, and how the combined international platform will drive cross-sell and margin uplift for multinational customers. A clear articulation of synergy capture and a reiteration of second-half EBIT expansion will be key to offsetting any GAAP noise in the quarter’s print.
Analyst Opinions
Bullish views dominate directional stances among recent opinions, with a bullish-to-bearish ratio of 1:0 during the past six months, while the remainder of commentary has been neutral. TD Cowen, led by analyst Gregory Williams, reiterates a Buy rating with a 54.00 price target, citing strong first-quarter execution, AI-enabled cost efficiencies, and capital discipline as pillars supporting the outlook. This thesis aligns with consensus expectations for the current quarter that call for 4.31% year-over-year revenue growth, 5.83% EBIT growth, and 6.96% adjusted EPS growth, implying that margin enhancement and operating leverage remain central to the story.
Supportive yet officially neutral shop takes provide additional context to the bullish majority stance. Morgan Stanley indicates results and execution should help allay concerns tied to the realignment plan and efforts to improve operational performance, albeit with an Equal Weight rating and a 49.00 price target. Bernstein’s Market Perform view acknowledges improving setup despite competitive intensity, reflecting an incrementally constructive tone even without a change in rating. These perspectives underscore a common thread: continued delivery on cost and capex discipline is expected to be the bridge between second-quarter expectations and any potential improvements to full-year guidance. Where the bullish camp adds conviction is in the belief that cost programs, alongside service monetization and early connected-vehicle traction, can extend the spread between revenue growth and EPS growth beyond what is already embedded in quarterly consensus.
Given the likely accounting loss associated with the international joint venture this quarter, analysts with constructive views emphasize the necessity of a clear adjusted narrative on the call. The bullish case anticipates that management can reframe GAAP transients against the strategic benefits of a sharper enterprise focus and improved long-term cash conversion. Additionally, the connected-vehicle win with BMW is seen by bullish analysts as a validation point for enterprise IoT capabilities that can create optionality in out-year revenue while being capital-light relative to network build already in place. In short, the prevailing buy-side of published opinions expects the second-quarter print to align with consensus on adjusted metrics and for management to reinforce a path to sustained EPS growth supported by service yield management, cost control, and targeted enterprise expansion.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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