Verizon Just Signed a More Than $1 Billion Dark Fiber Deal With Google. Here's What It Means for the 6.3% Dividend.

Verizon secured a dark fiber agreement with Google valued at more than $1 billion to connect data centers, CEO Dan Schulman disclosed. Schulman indicated the company expects to announce multiple additional deals worth billions of dollars by year-end, opening a new revenue channel in AI infrastructure.

The telecom raised full-year guidance for the second consecutive quarter. Management now projects free cash flow growth of 9-10% and adjusted earnings per share growth of 6-7%. First-half free cash flow hit $10.2 billion, covering $5.9 billion in dividend payments with significant margin.

The Google deal marks a shift for Verizon's connectivity business, which has historically struggled to generate growth. Dark fiber agreements allow customers to lease unused fiber-optic cable capacity, a service increasingly in demand as cloud providers and AI companies build out data center networks. The billable infrastructure contracts carry higher margins than traditional wireless services.

Verizon's 6.3% dividend yield remains well-supported by cash generation, with the new enterprise revenue stream providing upside to payout sustainability.