Key points
- Verizon (VZ) posted Q2 2026 adjusted EPS of $1.30, up 6.6%, and a record 40.1% EBITDA margin, then raised full-year guidance for the second straight quarter.
- On the same call, CEO Dan Schulman disclosed a dark fiber deal with Google worth more than $1 billion, and said more deals worth "multiple billions" in revenue are coming by year end.
- Revenue came in at $34.3 billion, down 0.7% year over year and short of what Wall Street expected.
- VZ shares climbed as much as 2.7% intraday to $44.95, a move driven by the earnings beat and guidance raise, not the Google deal.
Verizon (VZ) delivered the best margins in company history on its Friday call, then, almost as an afterthought, disclosed a fiber deal with Google, a unit of Alphabet (GOOGL), worth more than $1 billion. The earnings did the heavy lifting. VZ shares climbed as much as 2.7% intraday to $44.95, and the Google deal barely factored into why.
The reasons for the jump are straightforward. Adjusted EBITDA hit $13.7 billion, up 7.2% from a year earlier, at a 40.1% margin, the highest either number has ever been for Verizon. Postpaid phone additions of 184,000 beat expectations and were the best Q2 the consumer unit has had in five years. Guidance went up for the second quarter in a row. That's what moved the stock. The Google deal, tucked into the same call almost as an aside, wasn't part of it, and might end up mattering more than any of it.
What the Google deal actually is
This isn't Verizon selling phone service to Google, or buying cloud computing from Google. Chief executive Dan Schulman described a dark fiber agreement: Verizon is leasing unlit fiber-optic capacity that connects Google's data centers to each other and to the wider internet. Google supplies the equipment and lights the fiber itself. Verizon just owns and leases the physical glass in the ground, laid years ago for a phone network that increasingly has spare capacity to rent out.
"We have other deals that we expect to announce by year end that taken together are expected to be worth multiple billions of dollars in revenue over the next several years," Schulman told analysts. He did not name the other counterparties.
Not Verizon's first hyperscaler deal, but its first priced one
This is not new territory for Verizon. In November 2025, the company struck a similar agreement with Amazon Web Services, part of Amazon (AMZN), to build long-haul fiber pathways linking AWS data centers. Verizon branded it internally as AI Connect and never disclosed a dollar figure. The Google agreement is the first time Verizon has put a number on one of these deals. It's a big one. More than $1 billion for fiber leasing, a business that costs Verizon almost nothing extra since the network already exists.
Big Tech plans to spend about $725 billion on AI data centers in 2026. Most of that money has gone to companies that aren't Big Tech at all. Data center operators and lenders have taken in billions to house AI compute, the way TeraWulf borrowed $3.5 billion against an Anthropic lease. Now some of that money is going to the fiber lines connecting the buildings, not just the buildings themselves.
The earnings underneath the headline
Revenue told a less flattering story than the margin numbers. Verizon reported $34.3 billion, down 0.7% from a year ago and short of what Wall Street had penciled in. Reported GAAP earnings per share fell 22% to 92 cents. None of that stopped Verizon from raising full-year adjusted EPS guidance to $4.99 to $5.04, or from lifting its buyback target to as much as $4.5 billion. A phone company can shrink its top line and still post record profitability, if enough of its costs come out through layoffs and store closures. That's close to what has happened since Schulman took over from Hans Vestberg in October 2025.
Investors clearly decided the revenue miss didn't matter. The subscriber beat, the record margins and the guidance raise were enough to push shares up as much as 2.7% intraday. The Google deal was a footnote to that move, not a cause of it.
Why this matters more than the stock price suggests
Verizon and AT&T (T) have spent the past year quietly becoming landlords for the AI buildout instead of just carriers. Neither company had to build a single AI chip or data center to take part. They already owned the fiber and the towers. Google, Amazon and the rest of the hyperscaler field now need more physical network capacity than they can build themselves fast enough. They're willing to pay a legacy telecom for it. Schulman said more deals are coming by year end. This quarter's $1 billion is likely just the start.
