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Device Payment Plan Agreement and Wireless Service Receivables | 9 Months Ended
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Sep. 30, 2025
Receivables [Abstract] |
Device Payment Plan Agreement and Wireless Service Receivables |
Note 6. Device Payment Plan Agreement and Wireless Service Receivables
The following table presents information about accounts receivable, net of allowances, recorded in our condensed consolidated balance sheet:
| At September 30, 2025
(dollars in millions) | Device payment plan agreement |  | Wireless service |  | Other receivables(1) |  | Total
Accounts receivable | $ | 15,738 |  |  | $ | 6,123 |  |  | $ | 5,222 |  |  | $ | 27,083 |
Less Allowance for credit losses | 740 |  |  | 242 |  |  | 181 |  |  | 1,163 |
Accounts receivable, net of allowance | $ | 14,998 |  |  | $ | 5,881 |  |  | $ | 5,041 |  |  | $ | 25,920 |
(1) Other receivables primarily include wireline and other receivables, of which the allowances are individually insignificant. Included in Other assets and Accounts receivable, net at September 30, 2025 and December 31, 2024, are net device payment plan agreement receivables, net wireless service receivables and net other receivables of $30.2 billion and $29.9 billion, respectively, which have been transferred to ABS Entities and continue to be reported in our condensed consolidated balance sheets. Included in Accounts receivable, net at September 30, 2025 and December 31, 2024, are net other receivables of $838 million and $1.2 billion, respectively, on which a participation interest has been transferred to ABS Entities and continue to be reported in our condensed consolidated balance sheets. See Note 5 for additional information. We believe the carrying value of these receivables approximate their fair value using a Level 3 expected cash flow model. Under the Verizon device payment program, our eligible wireless customers purchase wireless devices under a device payment plan agreement. Customers that activate service on devices purchased under the device payment program pay lower service fees as compared to those under our fixed-term service plans, and their device payment plan charge is included on their wireless monthly bill. While we no longer offer Consumer customers fixed-term subsidized service plans for devices, we continue to offer subsidized plans to our Business customers. We also continue to service existing plans for customers who have not yet purchased and activated devices under the Verizon device payment program. Wireless Device Payment Plan Agreement Receivables The following table displays both the current and non-current portions of device payment plan agreement receivables, net, recognized in our condensed consolidated balance sheets:
| At September 30, |  | At December 31,
(dollars in millions) | 2025 |  | 2024
Device payment plan agreement receivables, gross | $ | 31,445 |  |  | $ | 31,308 |
Unamortized imputed interest | (1,005) |  |  | (975) |
Device payment plan agreement receivables, at amortized cost | 30,440 |  |  | 30,333 |
Allowance(1) | (1,427) |  |  | (1,315) |
Device payment plan agreement receivables, net | $ | 29,013 |  |  | $ | 29,018 |
Classified in our condensed consolidated balance sheets: |  |  |
Accounts receivable, net | $ | 14,998 |  |  | $ | 15,141 |
Other assets | 14,015 |  |  | 13,877 |
Device payment plan agreement receivables, net | $ | 29,013 |  |  | $ | 29,018 |
(1) Includes allowance for both short-term and long-term device payment plan agreement receivables. For indirect channel wireless contracts with customers, we impute risk adjusted interest on the device payment plan agreement receivables. We record the imputed interest as a reduction to the related accounts receivable. The associated interest income, which is included within Service revenues and other in our condensed consolidated statements of income, is recognized over the financed device payment term. Promotions In connection with certain device payment plan agreements, we may offer a promotion to allow our customers to upgrade to a new device after paying down a certain specified portion of the required device payment plan agreement amount as well as trading in their device in good working order. When a customer enters into a device payment plan agreement with the right to upgrade to a new device, we account for this trade-in right as a guarantee obligation. We may offer certain promotions that allow a customer to trade in their owned device in connection with the purchase of a new device. Under these types of promotions, the customer receives a credit for the value of the trade-in device. At September 30, 2025 and December 31, 2024, the amount of trade-in liability was $300 million and $396 million, respectively. In addition, we may provide the customer with additional future billing credits that will be applied against the customer’s monthly bill as long as service is maintained. These future billing credits are accounted for as consideration payable to a customer and are included in the determination of total transaction price, resulting in a contract liability. Device payment plan agreement receivables, net, disclosed in the table above, does not reflect the trade-in liability, additional future credits or the guarantee liability. Origination of Device Payment Plan Agreements When originating device payment plan agreements, we use internal and external data sources to create a credit risk score to measure the credit quality of a customer and to determine eligibility for the device payment program. Verizon's experience has been that the payment attributes of longer tenured customers are highly predictive for estimating their reliability to make future payments. Customers with longer tenures tend to exhibit similar risk characteristics to other customers with longer tenures, and receivables due from customers with longer tenures tend to perform better than receivables from customers that have not previously been Verizon customers. As a result of this experience, we make initial lending decisions based upon whether the customers are "established customers" or "short-tenured customers." If a Consumer customer has been a customer for 45 days or more, or if a Business customer has been a customer for 12 months or more, the customer is considered an "established customer." For established customers, the credit decision and ongoing credit monitoring processes rely on a combination of internal and external data sources. If a Consumer customer has been a customer less than 45 days, or a Business customer has been a customer for less than 12 months, the customer is considered a "short-tenured customer." For short-tenured customers, the credit decision and credit monitoring processes rely more heavily on external data sources. Available external credit data from credit reporting agencies along with internal data are used to create custom credit risk scores for Consumer customers. The custom credit risk score is generated automatically from the applicant's credit data using proprietary custom credit models. The credit risk score measures the likelihood that the potential customer will become severely delinquent and be disconnected for non-payment. For a small portion of short-tenured customer applications, a traditional credit report is not available from one of the national credit reporting agencies because the potential customer does not have sufficient credit history. In those instances, alternative credit data is used for the risk assessment. For Business customers, we also verify the existence of the business with external data sources. Based on the custom credit risk score, we assign each customer a credit class, each of which has specified offers of credit. This includes an account level spending limit and a maximum amount of credit allowed per device for Consumer customers or a required down payment percentage for Business customers. Credit Quality Information Subsequent to origination, we assess indicators for the quality of our wireless device payment plan agreement portfolio using two models, one for new customers and one for existing customers. The model for new customers pools all Consumer and Business wireless customers based on less than 210 days as "new customers." The model for existing customers pools all Consumer and Business wireless customers based on 210 days or more as "existing customers." The following table presents device payment plan agreement receivables, at amortized cost, and gross write-offs recorded, as of and for the nine months ended September 30, 2025, by credit quality indicator and year of origination:
| Year of Origination(1) |  |
(dollars in millions) | 2025 |  | 2024 |  | 2023 and prior |  |  |  | Total
Device payment plan agreement receivables, at amortized cost |  |  |  |  |  |  |  |  |
New customers | $ | 2,603 |  |  | $ | 1,952 |  |  | $ | 733 |  |  |  |  | $ | 5,288 |
Existing customers | 11,424 |  |  | 9,631 |  |  | 4,097 |  |  |  |  | 25,152 |
Total | $ | 14,027 |  |  | $ | 11,583 |  |  | $ | 4,830 |  |  |  |  | $ | 30,440 |
Gross write-offs |  |  |  |  |  |  |  |  |
New customers | $ | 110 |  |  | $ | 421 |  |  | $ | 135 |  |  |  |  | $ | 666 |
Existing customers | 21 |  |  | 161 |  |  | 155 |  |  |  |  | 337 |
Total | $ | 131 |  |  | $ | 582 |  |  | $ | 290 |  |  |  |  | $ | 1,003 |
(1) Includes accounts that have been suspended at a point in time. The data presented in the table above was last updated on September 30, 2025. We assess indicators for the quality of our wireless service receivables portfolio as one overall pool. The following table presents wireless service receivables, at amortized cost, and gross write-offs recorded, as of and for the nine months ended September 30, 2025, by year of origination:
| Year of Origination |  |
(dollars in millions) | 2025 |  | 2024 and prior |  |  |  | Total
Wireless service receivables, at amortized cost | $ | 6,041 |  |  | $ | 82 |  |  |  |  | $ | 6,123 |
Gross write-offs | 201 |  |  | 189 |  |  |  |  | 390 |
The data presented in the table above was last updated on September 30, 2025. Allowance for Credit Losses The credit quality indicators are used in determining the estimated amount and the timing of expected credit losses for the device payment plan agreement and wireless service receivables portfolios. For device payment plan agreement receivables, we record bad debt expense based on a default and loss calculation using our proprietary loss model. The expected loss rate is determined based on customer credit scores and other qualitative factors as noted above. The loss rate is assigned individually on a customer by customer basis and the custom credit scores are then aggregated by vintage and used in our proprietary loss model to calculate the weighted-average loss rate used for determining the allowance balance. We monitor the collectability of our wireless service receivables as one overall pool. Wireline service receivables are disaggregated and pooled by the following types of customers and related contracts: consumer, small and medium business, enterprise, public sector and wholesale. For wireless service receivables and wireline consumer and small and medium business receivables, the allowance is calculated based on a 12 month rolling average write-off balance multiplied by the average life-cycle of an account from billing to write-off. The risk of loss is assessed over the contractual life of the receivables and is adjusted based on the historical loss amounts for current and future conditions based on management's qualitative considerations. For enterprise, public sector and wholesale wireline receivables, the allowance for credit losses is based on historical write-off experience and individual customer credit risk, if applicable. Activity in the allowance for credit losses by portfolio segment of receivables was as follows:
(dollars in millions) | Device Payment Plan Agreement Receivables(1) |  | Wireless Service Plan Receivables
Balance at January 1, 2025 | $ | 1,315 |  |  | $ | 240 |
Current period provision for expected credit losses | 1,080 |  |  | 355 |
Write-offs charged against the allowance | (1,003) |  |  | (390) |
Recoveries collected | 35 |  |  | 37 |
Balance at September 30, 2025 | $ | 1,427 |  |  | $ | 242 |
(1) Includes allowance for both short-term and long-term device payment plan agreement receivables. We monitor delinquency and write-off experience based on the quality of our device payment plan agreement and wireless service receivables portfolios. The extent of our collection efforts with respect to a particular customer are based on the results of our proprietary custom internal scoring models that analyze the customer's past performance to predict the likelihood of the customer falling further delinquent. These custom scoring models assess a number of variables, including origination characteristics, customer account history and payment patterns. Since our customers’ behaviors may be impacted by general economic conditions, we analyzed whether changes in macroeconomic conditions impact our credit loss experience and have concluded that our credit loss estimates are generally not materially impacted by reasonable and supportable forecasts of future economic conditions. Based on the score derived from these models, accounts are grouped by risk category to determine the collection strategy to be applied to such accounts. For device payment plan agreement receivables and wireless service receivables, we consider an account to be delinquent and in default status if there are unpaid charges remaining on the account on the day after the bill’s due date. The risk class determines the speed and severity of the collections effort including initiatives taken to facilitate customer payment. The balance and aging of the device payment plan agreement receivables, at amortized cost, were as follows:
| At September 30, |  |
(dollars in millions) | 2025 |  |
Unbilled | $ | 28,930 |  |  |
Billed: |  |  |
Current | 1,178 |  |  |
Past due | 332 |  |  |
Device payment plan agreement receivables, at amortized cost | $ | 30,440 |  |  |

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