AT&T vs. Verizon Q3 2026: AT&T grew revenue 5.3% to Verizon's 1.5%, but Verizon's profit was cleaner

AT&T and Verizon both reported the third quarter of 2026 in the same week, and on the surface they look like mirror images. AT&T grew revenue 5.3% to $32,322 million but reported diluted EPS of just $0.13, down 89.9%. Verizon grew revenue only 1.5% to $34,313 million, yet diluted EPS rose 6.8% to $1.25. This comparison uses only the figures in our two published analyses: AT&T Q3 2026 and Verizon Q3 2026. Both were written from the companies' earnings releases, before either 10-Q was filed.

At a glance

• Revenue growth: AT&T +5.3%, Verizon +1.5%. AT&T's growth was broad, phone sales included. Verizon's service revenue grew 3.5%, but it deliberately sold fewer subsidized phones, so equipment revenue fell 9.0%.
• Phone customers: 379,000 vs 406,000 postpaid phone net adds. Verizon edged ahead (it added 44,000 a year ago), but its revenue per account fell 1.9%. AT&T's adds slipped from 405,000 a year ago.
• Home internet: 769,000 vs 314,000 net adds. AT&T had a record quarter; Verizon's fixed wireless additions fell 39.1%.

Side by side

A few terms. Postpaid customers pay a monthly bill, usually on contract, and are the most valuable kind for a carrier. Churn is the share of those customers who cancel in a month. EBITDA is earnings before interest, tax, depreciation and amortization, a rough measure of the cash profit from running the network. Operating margin is the share of revenue left after running the business, before interest and tax. ARPA (average revenue per account) is the monthly service bill per postpaid account, which usually covers several lines. The two companies don't define leverage the same way, so the last row compares each with its own history, not with each other.

Growth: AT&T is growing; Verizon is mostly buying growth

AT&T's growth is broad. Inside its Advanced Connectivity segment (5G wireless and fiber in the U.S.), service revenue rose 6.1%, and wireless service alone rose 5.0% to $17,764 million, up from 3.3% in Q2. The release credits more subscribers in "underpenetrated categories" and pricing actions, partly offset by promotions. Home internet revenue rose 23.4%, though part of that is the Lumen fiber business AT&T bought in Q1, and the release doesn't say how much. Its shrinking copper business (Legacy) fell 24.5%, which is the drag management expects.

Verizon's growth is narrower. Mobility and broadband service revenue grew 2.9%. In Q2, the Frontier fiber business Verizon bought in January added $712 million to its Consumer segment, more than that quarter's entire increase. Our Verizon report infers that if Frontier contributed a similar amount in Q3, the acquisition accounts for all of the growth and the existing wireless business shrank slightly. That is an inference the 10-Q will confirm or correct. The cleaner evidence is ARPA: $168.08, down 1.9% from a year ago and a steeper drop than Q2's 1.4%. Verizon is adding accounts, but each one pays less.

Both companies' growth includes an acquisition, so neither headline rate is fully organic. The difference is that AT&T's wireless service line, which neither acquisition touches, grew 5.0%, while Verizon's revenue per account fell.

Customers: the phone race tightened; home internet did not

On postpaid phones the two are now close: Verizon 406,000, AT&T 379,000. Verizon's figure is the bigger change, from 44,000 a year ago, its best third quarter in five years, with churn improving to 0.94%. AT&T's adds fell from 405,000 a year ago and 432,000 in Q2, and its churn rose to 0.92% from 0.86% in Q2 (flat against a year ago).

The two got there differently. Verizon cut spending on phone subsidies: its upgrade rate fell to 2.6% from 3.3%, promotional costs to win a customer fell 41% and to keep one fell 30%, and it leaned on cheaper plans and a loyalty program. That is why its equipment revenue fell 9.0% while AT&T's rose 12.2%.

In home internet the gap is wide. AT&T added 769,000 customers, a company record, with fiber net adds up 43% to 442,000 (excluding acquired customers). Verizon added 314,000, close to last year's 322,000, but only because fiber (155,000) made up for fixed wireless, which fell 39.1% to 159,000. Fixed wireless is home internet delivered over the mobile network, and it has been Verizon's main home-grown broadband engine.

Profitability and earnings quality: Verizon is cleaner

Verizon is the more profitable business on every reported line: a 25.2% operating margin against AT&T's 12.7%, and net income of $5,198 million against $891 million. Its profit growth also holds up under inspection. Our Verizon report rated the quarter clean: operating income rose 6.7% and adjusted EBITDA 8.0%, both in line with EPS growth of 6.8%. There were no write-downs or disposal gains in either year, and buybacks plus a slightly lower tax rate (22.0% vs 22.5%) added about two points of EPS growth rather than creating it. The adjusted-vs-reported gap is small ($1.31 vs $1.25), mostly recurring amortization from acquisitions.

AT&T's reported numbers are distorted in both directions, so neither its GAAP nor its adjusted figures can be taken at face value:

• Reported profit is understated. This quarter carries a $2.6 billion non-cash write-down of the Mexico business AT&T agreed to sell, and it was barely tax-deductible (a tax effect of $34 million on $3,502 million of pre-tax adjustments), so the effective tax rate was about 52%. The year-ago quarter was inflated by a $5,479 million gain on the DIRECTV stake. Remove both, and adjusted EPS rose to $0.65 from $0.54.
• Adjusted operating income is flattered. It rose 16.1%, but adjusted EBITDA, which ignores depreciation, rose only 5.4%, with its margin barely moving (38.7% vs 38.6%). The difference is lower depreciation on "fully depreciated legacy assets," which reflects old equipment reaching the end of its accounting life, not a more efficient business.
• Buybacks did more of the work at AT&T. Its diluted share count fell 4.5% after $2.8 billion of repurchases in the quarter, which our report estimates supplied roughly 5 of about 18 points of adjusted EPS growth. Verizon's share count fell 1.7%, on $500 million of buybacks.

So the like-for-like measure of operating profit growth is adjusted EBITDA: Verizon +8.0%, AT&T +5.4%. On that basis Verizon grew its cash profit faster, even though AT&T grew revenue much faster. Verizon's gain came largely from spending less: smaller phone subsidies and a 3.5% cut in selling, general and administrative costs.

Cash, network spending and debt

Both companies paid for a large purchase with debt this year, and interest expense rose by almost the same proportion: AT&T +16.4% to $1,979 million (the $22.8 billion EchoStar spectrum purchase), Verizon +17.2% to $1,950 million (Frontier).

Their balance sheets have moved in opposite directions since. AT&T's leverage rose to 3.13 times adjusted EBITDA from 2.59 times, and its target of about 2.5 times moved out to "during 2029". Its nine-month free cash flow was $12,129 million on our report's calculation, against $14,080 million a year earlier (which included DIRECTV cash flows), and it needs roughly $5.9 billion in Q4 to reach its $18 billion+ target, while still planning about $10 billion of buybacks this year. Verizon's leverage on its own measure improved to 2.3 times from 2.5 times in Q2, although our report notes that total debt actually rose slightly, to $166.2 billion; the improvement came from more cash and from counting more hybrid bonds as half equity.

Free cash flow (operating cash flow minus capital spending) flatters Verizon this quarter. Of its $845 million increase, $594 million came from capital spending falling to $3,716 million from $4,310 million, and its unchanged $16.0 to $16.5 billion full-year capital budget implies $4.1 to $4.6 billion in Q4. It also excludes about $3.2 billion of spectrum payments in Q3. AT&T is cutting capital spending too, but in its guidance rather than this quarter: $23 to $24 billion in 2026, then $22 to $23 billion a year in 2027 and 2028, down from $23 to $24 billion a year. For both companies, the question is whether lower network spending can coexist with the fiber build each is relying on.

Both reports flagged the same working-capital item: inventory up since December (AT&T +19.5%, Verizon +13.7%), with no explanation in either release. It may be stocking ahead of the holiday quarter; the 10-Qs should say.

Guidance: both raised, for different reasons

AT&T's new EPS figure sits above the top of its old range, though our report notes it implies a Q4 near $0.54, below Q3's $0.65, with the extra EchoStar debt now carrying interest every quarter. Verizon's raised targets require Q4 phone additions of 455,000 to 555,000, above Q3's record, at the same time as capital spending steps up.

Takeaway: The two carriers won the quarter on different scorecards. AT&T had the stronger business quarter: revenue +5.3% against +1.5%, wireless service revenue +5.0% on a line its acquisition doesn't touch, and 769,000 home internet adds against 314,000. Verizon had the stronger set of numbers: a clean 6.8% EPS gain, a 25.2% operating margin, adjusted EBITDA +8.0% against AT&T's +5.4%, and falling leverage while AT&T's rose to 3.13x. The catch for each points the same way as its strength. Verizon's profit growth came from spending less while revenue per account fell 1.9%, which can't run forever once Frontier stops adding to year-over-year growth after January. AT&T's growth is real but more expensive, paid for with more debt and a buyback program that supplied roughly 5 of about 18 points of its adjusted EPS growth.

What to watch next quarter

• Verizon's ARPA and the Frontier contribution. The 10-Q should show whether postpaid service revenue was still shrinking in Q3; if it was, the existing wireless business is not growing.
• AT&T's churn through the holiday promotions, after rising to 0.92% from 0.86% in Q2, and whether its Mexico sale closes as agreed.
• Capital spending against the fiber build at both. Verizon's plan implies its heaviest spending quarter of the year in Q4; AT&T's lower 2027–2028 budget has to deliver its fiber targets (more than 40 million locations passed by the end of 2026).