Verizon Communications Inc. signed a fiber infrastructure agreement with Alphabet Inc.'s Google worth more than $1 billion, CEO Dan Schulman announced during the company's second-quarter earnings call on Friday. The deal positions Verizon to provide dark fiber connecting Google's data centers as demand for AI infrastructure connectivity surges. Schulman described the AI infrastructure buildout across the United States as one of the largest capital cycles of our lifetime, with Verizon leveraging its extensive fiber network to meet growing hyperscaler demand.
Verizon Provides Dark Fiber to Connect Google Data Centers
Schulman said Verizon will provide dark fiber to connect Google's data centers under the agreement. He said the company's low-latency, carrier-grade transport network, originally built for a different era, has become "exactly the right asset" for connecting AI data centers, compute clusters and regions. Schulman also said Verizon is converting many of its central offices into inference edge data centers and is in discussions with partners interested in using the power-ready sites.
Schulman Announces Additional Deals Expected by Year-End
Schulman said the Google agreement is only the beginning of Verizon's push into AI infrastructure connectivity. He said the company expects to announce additional deals by year-end that, collectively, are expected to generate multiple billions of dollars in revenue over the next several years. Schulman described the upcoming deals as long-duration, high-quality revenue streams from some of the world's most demanding infrastructure customers. He termed the announcement as "consequential," adding that this foreshadows what the company's revenue growth profile will look like going forward.
Verizon Reports Q2 EPS of $1.3 on Revenue of $34.3 Billion
Verizon reported second-quarter earnings per share of $1.3 on revenue of $34.3 billion, while Wall Street expected an EPS of $1.27 on revenue of $35.1 billion, according to Fiscal.ai data. The company lifted its EPS outlook to $4.99 to $5.04, from $4.95 to $4.99 that it guided for in the first quarter, compared to Wall Street estimates of $4.94. Verizon also expanded its full-year share repurchase target to up to $4.5 billion after buying back $3.5 billion worth of shares through the first half of the year. Schulman said Verizon expects this initiative to noticeably contribute to revenue growth starting next year.
VZ Shares Rise 3% in Friday Opening Trade
Verizon shares were up more than 3% in Friday's opening trade, while Alphabet's Class A shares were up about 1%. VZ was among the top trending tickers on Stocktwits at the time of writing. VZ stock is up 11% year-to-date, while GOOGL stock is up 2%. The S&P 500 ETF is up 17% over the past 12 months.
FAQ
What did Verizon announce on Friday during its Q2 earnings call?
Verizon announced it signed a fiber infrastructure agreement with Google worth more than $1 billion, with CEO Dan Schulman stating the company will provide dark fiber to connect Google's data centers.
What additional deals did Schulman say Verizon expects to announce?
Schulman said Verizon expects to announce additional deals by year-end that are expected to generate multiple billions of dollars in revenue over the next several years from infrastructure customers.
What were Verizon's Q2 financial results?
Verizon reported Q2 earnings per share of $1.3 on revenue of $34.3 billion and lifted its full-year EPS outlook to $4.99 to $5.04, expanding its share repurchase target to up to $4.5 billion.
