Telecommunications giant Verizon (NYSE: VZ) fell short of the market’s revenue expectations in Q2 CY2026, with sales flat year on year at $34.25 billion. Its non-GAAP profit of $1.30 per share was 2.7% above analysts’ consensus estimates.

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Company Overview

Formed in 1984 as Bell Atlantic after the breakup of Bell System into seven companies, Verizon (NYSE: VZ) is a telecom giant providing a range of communications and internet services.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Unfortunately, Verizon struggled to consistently increase demand as its $138.9 billion of sales for the trailing 12 months was close to its revenue five years ago. This wasn’t a great result and suggests it’s a low quality business.

Long-term growth is the most important, but within consumer discretionary, product cycles are short and revenue can be hit-driven due to rapidly changing trends and consumer preferences. Verizon’s annualized revenue growth of 1.7% over the last two years aligns with its five-year trend, suggesting its demand was consistently weak.

This quarter, Verizon missed Wall Street’s estimates and reported a rather uninspiring 0.7% year-on-year revenue decline, generating $34.25 billion of revenue.

Looking ahead, sell-side analysts expect revenue to grow 3.4% over the next 12 months. While this projection suggests its newer products and services will catalyze better top-line performance, it is still below average for the sector.

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Operating Margin

Verizon’s operating margin has generally stayed the same over the last 12 months, and we generally like to see margin increases due to economies of scale and cost efficiency over time.

This quarter, Verizon generated an operating margin profit margin of 21%, down 2.7 percentage points year on year. This contraction shows it was less efficient because its expenses increased relative to its revenue.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Sadly for Verizon, its EPS declined by 1% annually over the last five years. We tend to steer our readers away from companies with falling revenue and EPS, where diminishing earnings could imply changing secular trends and preferences.Consumer Discretionary companies are particularly exposed to this, and if the tide turns unexpectedly, Verizon’s low margin of safety could leave its stock price susceptible to large downswings.

In Q2, Verizon reported adjusted EPS of $1.30, up from $1.22 in the same quarter last year. This print beat analysts’ estimates by 2.7%. Over the next 12 months, Wall Street expects Verizon’s full-year EPS to grow 3.7% from $4.88 to $5.06.

Key Takeaways from Verizon’s Q2 Results

We struggled to find many positives in these results. Overall, this was a weaker quarter. The stock remained flat at $43.89 immediately following the results.

Verizon didn’t show its best hand this quarter, but does that create an opportunity to buy the stock right now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).