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AT&T INC. (T)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered solid top-line and cash flow, with revenues at $30.8B (+3.5% YoY), adjusted EPS $0.54 (+5.9% YoY), adjusted EBITDA $11.7B, and free cash flow $4.4B; consolidated service revenues, Mobility service revenues (+3.5% YoY), and Consumer Wireline fiber revenues (+18.9% YoY) were key drivers .
  • Versus estimates (S&P Global), AT&T modestly beat on revenue and EPS; revenue outperformed by ~$0.37B and adjusted EPS by ~$0.01; adjusted EBITDA exceeded consensus by ~$0.13B* (Values retrieved from S&P Global).
  • Guidance updated: raised Mobility service revenue growth to “3% or better,” lifted Consumer fiber broadband growth to “mid-to-high teens,” increased share repurchase target to $4B for 2025; Mobility EBITDA growth tempered to “~3%,” Business Wireline EBITDA decline improved to “low-double-digit,” capital investment nudged to $22–$22.5B, and free cash flow guided to low-to-mid $16B .
  • Strategic catalysts: passage of the One Big Beautiful Bill Act (cash tax savings $6.5–$8.0B over 2025–2027), accelerated fiber build to ~4M locations/year by end-2026 and roadmap to ~50M in-region fiber locations by 2030 (>60M including Lumen footprint/Gigapower/open-access), closing of the remaining 70% DIRECTV stake sale to TPG, and Lumen Mass Markets fiber acquisition .

What Went Well and What Went Wrong

What Went Well

  • Mobility service revenue grew 3.5% YoY to $16.9B with 401K postpaid phone net adds; ARPU increased 1.1% YoY, supporting EBITDA growth; management emphasized strong converged customer adoption and cost initiatives driving operating leverage .
  • Consumer Wireline broadband strength: fiber revenue +18.9% YoY; 243K Fiber net adds and record 203K Internet Air net adds; broadband ARPU up 7.5% YoY, driving EBITDA +17.8% YoY and margin expansion .
  • Strategic/tax tailwinds: expected $6.5–$8.0B cash tax savings (2025–2027) enabling accelerated fiber build, pension contributions (~95% funded by end-2026), added financial flexibility; CEO: “We are winning…with the nation’s largest wireless and fiber networks,” and CFO detailed convergence rate rising to 40.9% .

What Went Wrong

  • Mobility churn rose: postpaid phone-only churn at 0.87% (+17 bps YoY) amid device financing expirations and an active competitive backdrop; management plans for seasonally higher churn in H2 .
  • Business Wireline headwinds persisted: revenues -9.3% YoY and EBITDA -11.3% YoY on legacy service secular pressure; margins compressed with operating loss .
  • Mexico/FX drag: Latin America revenues -4.4% YoY due to FX, partially offset by equipment sales and ARPU/sub growth; management cited macro/tariff uncertainty and public-sector budget softness as watch items .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Billions)$29.797 $30.626 $30.847
Diluted EPS ($)$0.49 $0.61 $0.62
Adjusted EPS ($)$0.51 $0.51 $0.54
Operating Income ($USD Billions)$5.760 $5.754 $6.501
Adjusted EBITDA ($USD Billions)$11.337 $11.533 $11.731
Adjusted EBITDA Margin (%)38.0% 37.7% 38.0%
Cash from Operations ($USD Billions)$9.093 $9.049 $9.763
Capital Investment ($USD Billions)$4.910 $4.480 $5.117
Free Cash Flow ($USD Billions)$3.954 $3.146 $4.394

Segment Breakdown (Q2 YoY)

Segment MetricQ2 2024Q2 2025
Mobility Revenues ($USD Billions)$20.480 $21.845
Mobility EBITDA ($USD Billions)$9.195 $9.487
Business Wireline Revenues ($USD Billions)$4.755 $4.313
Business Wireline EBITDA ($USD Billions)$1.488 $1.320
Consumer Wireline Revenues ($USD Billions)$3.347 $3.541
Consumer Wireline EBITDA ($USD Billions)$1.098 $1.293
Latin America Revenues ($USD Billions)$1.103 $1.054
Latin America EBITDA ($USD Billions)$0.178 $0.201

KPIs

KPIQ2 2024Q1 2025Q2 2025
Postpaid Phone Net Adds (000s)419 324 401
Postpaid Churn (%)0.85 0.99 1.02
Postpaid Phone-Only Churn (%)0.70 0.83 0.87
Postpaid Phone ARPU ($)$56.42 $56.56 $57.04
Broadband Net Adds (000s)52 150 150
Fiber Net Adds (000s)239 261 243
Internet Air Net Adds (000s)139 181 203
Broadband ARPU ($)$66.17 $70.87 $71.16
Fiber ARPU ($)$69.00 $72.85 $73.26

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Mobility Service Revenue GrowthFY 2025High end of 2–3% 3% or better Raised
Consumer Fiber Broadband Revenue GrowthFY 2025Mid-teens Mid-to-high teens Raised
Adjusted EBITDA GrowthFY 2025≥3% ≥3% Maintained
Mobility EBITDA GrowthFY 2025High end of 3–4% ~3% Lowered
Business Wireline EBITDAFY 2025Mid-teens decline Low-double-digit decline Improved
Consumer Wireline EBITDAFY 2025High-single to low-double-digit growth Low-to-mid-teens growth Raised
Capital Investment ($)FY 2025~$22B $22–$22.5B Raised
Free Cash Flow ($)FY 2025$16B+ Low-to-mid $16B Slightly Raised/Narrowed
Adjusted EPS ($)FY 2025$1.97–$2.07 $1.97–$2.07 Maintained
Share RepurchasesFY 2025≥$3B by YE (prior plan) $4B; ~$1.3B YTD Raised
Capital Investment ($/yr)FY 2026–27Prior AIDay baseline$23–$24B/yr Raised (long-term)
Free Cash Flow ($/yr)FY 2026–27Prior AIDay baseline$18B+ (2026), $19B+ (2027) Raised (long-term)
Dividend (Common)Next Payment$0.2775 declared (Aug 1) $0.2775 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
Convergence (Fiber + 5G)“4 of 10” fiber households choose AT&T wireless ; strong Q4 momentum Convergence rate 40.9%; accelerating adoption and lifetime value focus Improving
Mobility Churn/CompetitionQ4 phone churn ~0.85% ; Q1 phone-only churn 0.83% Phone-only churn 0.87% with cohort expirations; planning for active H2 Slightly worse near-term
Fiber Build/Reach29.5M locations passed (Q1) >30M locations passed; roadmap to ~50M in-region by 2030; >60M with Lumen/Gigapower/open-access Accelerating
Tax/Spectrum Policy—One Big Beautiful Bill Act tax savings $6.5–$8.0B; spectrum pipeline renewed; FCC auction authority Positive tailwind
Wireline TransformationCost takeout in Q1 Copper retirement filings (~10% of wire centers in 17 states); improved Wireline EBITDA guidance Improving
Macro/Tariffs/Public Sector—Tariff uncertainty, public-sector budget softness noted; manageable impact Watch item
Share Repurchases/LeverageRepurchases planned in H2 2025 $4B buyback in 2025; net leverage ~2.64x Increased capital returns

Management Commentary

  • CEO: “We are winning in a highly competitive marketplace, with the nation's largest wireless and fiber networks… milestones achieved this quarter… strengthen the industry's best and leading connectivity portfolio.”
  • CFO: “Adjusted EPS was $0.54… free cash flow $4.4B… we are increasing our full-year guidance for Mobility service revenue growth to 3% or better… Consumer Wireline EBITDA growth to low-to-mid-teens.”
  • CEO on fiber returns: “Costs per unit will go up… but not at a level that deteriorates competitive returns... converged dynamic improves economics.”
  • CFO on tax legislation: “We expect to realize between $6.5–$8B in cash tax savings 2025–2027… reinvest into accelerated fiber build; pension funding to ~95%.”

Q&A Highlights

  • Churn dynamics and pricing: Elevated churn linked to device financing completions and market activity; management does not view pricing as the key churn driver, emphasizes value-based pricing and seasonal planning .
  • Spectrum strategy and leverage: With renewed auction authority and a pipeline, AT&T sees disciplined valuations and flexibility at ~2.5x net debt/adj. EBITDA to pursue asset acquisitions (e.g., spectrum) without compromising shareholder commitments .
  • Fiber returns and footprint expansion: Returns remain attractive across the footprint; convergence enhances household economics; plan to scale both fiber and fixed wireless as complementary offerings to broaden reach and funnel future fiber upgrades .
  • Mobility margins trajectory: Near-term growth spending is lumpy amid higher volumes; excluding growth spend, operating leverage remains strong; margins expected to perform well over time .
  • Macro considerations: Positive policy tailwinds (tax, spectrum, modernization) offset caution on tariffs and public-sector budget shifts; prepaid trends partly influenced by immigration dynamics .

Estimates Context

MetricQ2 2024Q1 2025Q2 2025
Revenue Consensus Mean ($USD Billions)29.981*30.362*30.476*
Revenue Actual ($USD Billions)29.797 30.626 30.847
Difference ($USD Billions)-0.184*+0.264*+0.371*
Primary EPS Consensus Mean ($)0.574*0.515*0.530*
Adjusted EPS Actual ($)0.51 0.51 0.54
Difference ($)-0.064*-0.005*+0.010*
EBITDA Consensus Mean ($USD Billions)11.302*11.320*11.600*
Adjusted EBITDA Actual ($USD Billions)11.337 11.533 11.731

Values retrieved from S&P Global.

  • Q2 2025: Revenue and EPS beat; adjusted EBITDA modestly above consensus — a constructive setup for estimate revisions.
  • Q1 2025: Revenue beat; EPS roughly in-line to slight miss; adjusted EBITDA beat supports operating momentum.
  • Q2 2024: Slight misses reflect prior-year baseline dynamics; trajectory since then has improved.

Key Takeaways for Investors

  • Convergence strategy is working: rising fiber + 5G adoption, higher ARPU, and improved Consumer Wireline EBITDA conversion underpin medium-term margin durability .
  • Near-term Mobility pressures (churn/competitive intensity) are manageable; elevated growth spend is targeted at high-LTV cohorts and should support service revenue and long-term returns .
  • Policy tailwinds (tax savings, spectrum pipeline) and accelerated fiber build are catalysts for higher capital efficiency and broader footprint — expect capex intensity to normalize as scale is achieved .
  • Guidance quality improved: raised service revenue/fiber growth and buybacks to $4B; tempered Mobility EBITDA growth reflects tactical reinvestment without altering consolidated EBITDA ≥3% trajectory .
  • Business Wireline transformation remains a drag but is improving; cost actions and legacy exits support a shallower decline (low-double-digit) vs prior mid-teens .
  • Strategic portfolio moves (DIRECTV sale, Lumen fiber asset acquisition/NetworkCo plan) add optionality and financial flexibility while keeping leverage in the ~2.5x range .
  • Trading lens: Modest beats and raised capital returns are supportive; watch churn trends and H2 seasonality (devices/holidays) and tariff/public-sector macro updates for near-term volatility .

Additional Relevant Press Releases (Q2 2025)

  • DIRECTV transaction close (remaining 70% sold to TPG) — simplifies portfolio and preserves FCF flexibility .
  • Accelerated fiber expansion post-One Big Beautiful Bill Act — plan to add ~1M more fiber locations annually starting 2026 .
  • Dividend declaration ($0.2775 per share, payable Aug 1, 2025) — ongoing capital return .
  • Lumen Mass Markets fiber acquisition ($5.75B) — expands fiber footprint and supports convergence; closing targeted H1 2026 .

Notes on Non-GAAP Adjustments

  • Adjusted EPS excludes equity in net income of DIRECTV and certain benefit-related, transaction, legal and other items; adjusted EBITDA excludes non-operational/one-time items; reconciliations provided in the 8-K and release .
  • Free cash flow definition revised to exclude DIRECTV-related cash flows; FCF drivers and dividend payout metrics disclosed with reconciliations .