⚠ Goodwill of $7.8 BillionModerate threat

Verizon (VZ) — threat to the moat

Frontier added $7.8 billion of goodwill to a company that wrote off $5.8 billion of wireline goodwill in 2023.

The Frontier purchase added $7,795 million of goodwill1, taking Verizon's total from $22,841 million at the end of 20252 to $30,664 million by June 20263. Goodwill is the part of a price that is not cable, licences or customer lists, the premium for expected growth.

Verizon goodwill at period end ($bn)22.8Dec 202530.7Jun 2026Verizon Q4 2025 and Q2 2026 results releases, balance sheets
Goodwill up a third in six months.

Verizon knows how that can go. In the fourth quarter of 2023 it recorded "non-cash goodwill impairment charge of approximately $5.8 billion" on its Business unit4, whose goodwill had been about $7.5 billion before the charge5. The 2023 10-K also showed how sensitive the test was: the charge would have been about $1.3 billion larger if the discount rate had been 50 basis points higher6.

Frontier's goodwill rests on fibre growth. If the business passes homes and does not fill them, the premium will have been paid for growth that did not come, and the test will say so.

The 2023 test also showed how little the assumptions had to move: the impairment would have risen "approximately $1.0 billion if the terminal value growth rate declined by 50 basis points, or $1.3 billion if the discount rate increased by 50 basis points"7. Frontier's goodwill is tested the same way, against the same kind of assumptions about growth and rates.

The measure is fibre revenue. If Verizon's fibre-based revenue, reported inside mobility and broadband service revenue, grows less than 5% in 2027 on an organic basis, the Frontier goodwill will be the next impairment candidate.

References
  1. ReportedThe Frontier purchase added $7,795 million of goodwill, taking Verizon's total from $22,841 million at the end of 2025 to $30,664 million by June 2026.
    Verizon Form 10-Q for the quarter ended 30 June 2026 - Frontier purchase accounting, buybacks, spectrum purchases and remaining performance obligations. — Q2 2026 · publ. 31 July 2026 · source ↗
  2. ReportedThe Frontier purchase added $7,795 million of goodwill, taking Verizon's total from $22,841 million at the end of 2025 to $30,664 million by June 2026.
    Verizon fourth-quarter and full-year 2025 results release, Form 8-K exhibit 99 - full-year operating statistics, segment EBITDA, free cash flow 2020-2025 and 2026 guidance - cash flow, capital spending, debt and 2026 guidance. — FY2025 · publ. 30 January 2026 · source ↗
  3. ReportedThe Frontier purchase added $7,795 million of goodwill, taking Verizon's total from $22,841 million at the end of 2025 to $30,664 million by June 2026.
    Verizon second-quarter 2026 results release, Form 8-K exhibit 99 - consolidated and segment results, operating statistics, cash flow, balance sheet and guidance - cash flow, balance sheet, capital returns and guidance. — Q2 2026 · publ. 24 July 2026 · source ↗
  4. ReportedIn the fourth quarter of 2023 it recorded "non-cash goodwill impairment charge of approximately $5.8 billion" on its Business unit, whose goodwill had been about $7.5 billion before the charge.
    Verizon Communications Inc. Form 10-K for fiscal 2023 - the C-Band licence payments and the $5.8 billion Business goodwill impairment. — FY2023 · publ. February 2024 · source ↗
  5. ReportedIn the fourth quarter of 2023 it recorded "non-cash goodwill impairment charge of approximately $5.8 billion" on its Business unit, whose goodwill had been about $7.5 billion before the charge.
    Verizon Communications Inc. Form 10-K for fiscal 2023 - the C-Band licence payments and the $5.8 billion Business goodwill impairment. — FY2023 · publ. February 2024 · source ↗
  6. ReportedThe 2023 10-K also showed how sensitive the test was: the charge would have been about $1.3 billion larger if the discount rate had been 50 basis points higher.
    Verizon Communications Inc. Form 10-K for fiscal 2023 - the C-Band licence payments and the $5.8 billion Business goodwill impairment. — FY2023 · publ. February 2024 · source ↗
  7. ReportedThe 2023 test also showed how little the assumptions had to move: the impairment would have risen "approximately $1.0 billion if the terminal value growth rate declined by 50 basis points, or $1.3 billion if the discount rate increased by 50 basis points".
    Verizon Communications Inc. Form 10-K for fiscal 2023 - the C-Band licence payments and the $5.8 billion Business goodwill impairment. — FY2023 · publ. February 2024 · source ↗
Sources
Generated September 29, 2026