On Wednesday, Verizon experienced a software-related outage that disrupted voice, text and data services for approximately 178,000 customers at its peak, with the heaviest concentration of reports coming from New York City, Atlanta, Charlotte and Houston. Service interruptions lasted up to ten hours in some areas, preventing customers from placing calls—including emergency 911 calls—and accessing mobile data. In response, Verizon has pledged a flat $20 account credit for each affected customer, which the company estimates could total more than $2.8 billion if all 140 million U.S. subscribers qualify. Business customers will be contacted separately about their credits. Verizon emphasized that the credit is not intended to fully compensate for the disruption but to acknowledge the time lost by its users.

Verizon’s first-quarter financial results, due to be released on January 30, will likely reflect the cost of these customer credits as well as any incremental expenses related to the incident investigation and remediation. With analysts projecting Q1 revenue of $36.06 billion—up from $35.70 billion in the prior year—and earnings per share of $1.06, down from $1.10, the $2.8 billion credit liability could meaningfully pressure both top- and bottom-line figures. The company has historically beaten consensus revenue estimates in three of the last four quarters and EPS estimates in three straight quarters, but this one-time charge may lead to a lower EPS beat rate or even a miss, depending on how Verizon allocates the expense across the quarter.

Following the outage, Verizon’s shares declined by 1.3% on Thursday, reversing a modest gain from the previous session when investors appeared unconcerned. The sell-off reflects heightened scrutiny over customer retention risk—given the importance of uninterrupted service in the telecom business—and the looming earnings report, which investors will view as a gauge for Verizon’s operational resilience. Market participants will be watching the company’s forward guidance carefully: any explicit breakout of outage-related costs in the guidance could spook investors, while a broad, conservative forecast may raise questions about transparency.