v3.26.1
Revenue and Contract Costs
 3 Months Ended
Mar. 31, 2026
Revenue from Contract with Customer [Abstract]  
Revenue and Contract Costs
Note 2. Revenue and Contract Costs
We earn revenue from contracts with customers, primarily through the provision of telecommunications and other services and through the sale of wireless equipment.

Revenue by Category
We have two reportable segments that we operate and manage as strategic business units, Consumer and Business. Revenue is disaggregated by products and services within our segments. See Note 10 for additional information on revenue by segment, including Corporate and other. During the three months ended March 31, 2026 and March 31, 2025, we recorded wireless service revenue of $20.6 billion and $20.8 billion, respectively.

We also earn revenues that are not accounted for under Topic 606 from leasing arrangements (such as those for towers and equipment), captive reinsurance arrangements primarily related to wireless device insurance and the interest recognized when equipment is sold to the customer by an authorized agent under a device payment plan agreement. We have elected the practical expedient within Topic 842, to combine the lease and non-lease components for those customer arrangements under Topic 606 that involve customer premise equipment where we are the lessor.

Remaining Performance Obligations
Remaining performance obligations represent the transaction price allocated to unsatisfied or partially unsatisfied service performance obligations as of the reporting date. We disclose information related to these amounts below. We have applied the practical expedient under Topic 606 to exclude revenue expected from contracts that have an original expected duration of one year or less. This exclusion primarily relates to our month-to-month service contracts. As of March 31, 2026, month-to-month service contracts represented approximately 95% of our wireless postpaid contracts and approximately 96% of our wireline Consumer and small and medium Business contracts, compared to March 31, 2025, for which month-to-month service contracts represented approximately 95% of both our wireless postpaid contracts and our wireline Consumer and small and medium Business contracts.

Remaining performance obligations primarily include performance obligations from contracts that are not accounted for as month-to-month. These contracts generally fall into the following categories:

•Mobility Services: Contracts with terms ranging from greater than one month up to thirty-six months, typically associated with a device payment plan or fixed-term plan. This also includes agreements with wholesale resellers, which generally have stated contract terms of longer than two years and may include periodic minimum revenue commitments.
•Fiber Broadband Services: Contracts with Consumer customers may have a service term of two years or shorter than twelve months. Contracts with Business customers, many of which have terms of twelve months or less, but some extend into future periods with fixed monthly fees, usage-based fees, and annual or total contract term commitments.

Certain wireline service contracts with Business customers have a contractual minimum fee over the total contract term, but we cannot predict the time period when that revenue will be recognized. Therefore, these specific revenues are excluded from the expected recognition timeframe disclosed below. These excluded contracts have varying terms spanning approximately twenty-seven years ending in September 2053 and have aggregate minimum contract payments totaling $1.4 billion.

At March 31, 2026, the aggregate amount of the transaction price related to unsatisfied performance obligations was $57.6 billion. We expect to recognize substantially all of this revenue from origination over the next thirty-six months, with the remainder recognized thereafter.

Remaining performance obligations estimates are subject to change due to various factors, including customer terminations and modifications to contract timing or scope.

Accounts Receivable and Contract Balances
The timing of revenue recognition may differ from the time of billing to our customers. Receivables presented in our condensed consolidated balance sheets represent an unconditional right to consideration. Contract balances represent amounts from an arrangement when either Verizon has performed, by transferring goods or services to the customer in advance of receiving all or partial consideration for such goods and services from the customer, or the customer has made the required payment to Verizon in advance of obtaining control of the goods and/or services promised to the customer in the contract.
The following table presents information about receivables from contracts with customers:
At March 31,
At December 31,
(dollars in millions)20262025
Accounts Receivable(1)
$9,329 $9,646 
Device payment plan agreement receivables(2)
21,386 21,726 
(1)Balances do not include receivables related to the following: activity associated with certain vendor agreements, leasing arrangements (such as those for towers and equipment), captive reinsurance arrangements primarily related to wireless device insurance and device payment plan agreement receivables presented separately.
(2)Included in device payment plan agreement receivables presented in Note 6. Receivables derived from the sale of equipment on a device payment plan through an authorized agent are excluded.
Contract assets relate to our conditional right to receive consideration for goods or services provided to customers. Under fixed-term plans, an asset is created because the equipment revenue recognized upon sale exceeds the consideration received; this asset is subsequently reclassified to accounts receivable as wireless services are provided and billed. These balances are reported in our condensed consolidated balance sheets as Prepaid expenses and other and Other assets. The allowance for credit losses is recognized at inception and reassessed quarterly.

Contract liabilities arise when we bill our customers and receive consideration in advance of providing the goods or services promised in the contract. We typically bill service one month in advance, which is the primary component of the contract liability balance. Contract liabilities are recognized as revenue when services are provided to the customer. The contract liability balances are presented in our condensed consolidated balance sheets as Other current liabilities and Other liabilities.

Revenues recognized related to contract liabilities existing at January 1, 2026 and January 1, 2025 were $4.6 billion for both the three months ended March 31, 2026 and March 31, 2025.

The balances of contract assets and contract liabilities recorded in our condensed consolidated balance sheets were as follows:
At March 31,At December 31,
(dollars in millions)20262025
Assets
Prepaid expenses and other$450 $518 
Other assets270 259 
Total Contract Assets$720 $777 
Liabilities
Other current liabilities$7,824 $7,576 
Other liabilities2,606 2,433 
Total Contract Liabilities$10,430 $10,009 

Contract Costs
Topic 606 requires an asset to be recognized for incremental costs to obtain a customer contract, which are then amortized to expense over the period of expected benefit. We recognize an asset for incremental commission expenses paid to internal and external sales personnel and agents, deferring these costs only when they are incremental and expected to be recoverable. The costs are amortized ratably as commission expense over the period of service transfer. Specifically, costs for postpaid wireless contracts (Consumer and Business) are amortized over the estimated upgrade cycles. Prepaid wireless and Consumer wireline contracts are amortized over the estimated customer relationship period. Costs to obtain contracts are recorded in Selling, general and administrative expenses.

We also defer costs incurred to fulfill contracts that: (1) relate directly to the contract; (2) are expected to generate resources that will be used to satisfy our performance obligation under the contract; and (3) are expected to be recovered through revenue generated under the contract. Contract fulfillment costs are expensed as we satisfy our performance obligations and recorded in Cost of services. These costs principally relate to direct costs that enhance our wireline business resources, such as costs incurred to install circuits.

We determine the amortization periods for our costs incurred to obtain or fulfill a customer contract at a portfolio level due to the similarities within these customer contract portfolios.

Other costs, such as general costs or costs related to past performance obligations, are expensed as incurred.

Collectively, costs to obtain a contract and costs to fulfill a contract are referred to as deferred contract costs, and amortized between a one-to-seven year period. Deferred contract costs are classified as current or non-current within Prepaid expenses and other and Other assets, respectively.
The balances of deferred contract costs included in our condensed consolidated balance sheets were as follows:
At March 31,At December 31,
(dollars in millions)20262025
Assets
Prepaid expenses and other$3,400 $3,315 
Other assets2,842 2,848 
Total$6,242 $6,163 

For the three months ended March 31, 2026 and March 31, 2025, we recognized expense of $1.0 billion and $877 million, respectively, associated with the amortization of deferred contract costs, primarily within Selling, general and administrative expense in our condensed consolidated statements of income.

We assess our deferred contract costs for impairment on a quarterly basis. We recognize an impairment charge to the extent the carrying amount of a deferred cost exceeds the remaining amount of consideration we expect to receive in exchange for the goods and services related to the cost, less the expected costs related directly to providing those goods and services that have not yet been recognized as expenses. There were no impairment charges recognized for the three months ended March 31, 2026 or March 31, 2025.