Verizon Communications gained a netprofile 184,000 postpaid phone connections in the second quarter, beating Wall Street’s expectations on a closely watched metric that gauges new lucrative customers.

Revenue ticked down 0.7% year over year to $34.25 billion, slightly below analyst estimates of $35.16 billion. Verizon attributed the decrease to a nearly 20% decline in equipment revenue as customers hold onto their mobile devices longer and longer before rigorous upgrades.

The carrier’s quarterly profit declined to $3.95 billion, or 92 cents a share, down from $5.12 billion, or $1.18 a share, a year earlier. The drop was largely driven by costs related to forming a new joint venture, while the company also cut back spending on new device subsidies.

Despite the profit hit, Verizon’s new postpaid connections signal continued demand, though the company faces challenges from a slowing equipment market and higher partnership expenses.