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AT&T INC. (T)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered steady operations: adjusted EPS of $0.54, adjusted EBITDA of $11.9B, and free cash flow of $4.9B, while consolidated revenue rose 1.6% YoY to $30.7B .
  • Versus consensus: slight EPS beat (Adj. $0.54 vs $0.538*) and EBITDA beat ($11.9B vs $11.74B*), but a modest revenue miss ($30.71B vs $30.885B*) .*
  • Guidance was reiterated across all metrics (service revenue, adjusted EBITDA, FCF, EPS, capital investment), with management signaling the high end of EPS range and Q4 FCF ≈$4B despite ~$0.5B legal cash settlements .
  • Strategic catalysts: post-quarter acceleration of EchoStar mid-band spectrum deployment to ~23,000 sites (up to 80% faster downloads), supporting converged growth and capital efficiency; continued fiber/Internet Air subscriber momentum .
  • Narrative driver: convergence strategy gaining traction (41% of fiber households also mobility; record broadband net adds in 8 years), while Business Wireline declines are being offset by accelerating fiber/advanced connectivity growth .

What Went Well and What Went Wrong

What Went Well

  • Convergence momentum: 41% of AT&T Fiber households also choose Mobility; 288k fiber net adds and 270k Internet Air net adds, driving Consumer Wireline broadband revenues up 8.2% and fiber revenues up 16.8% YoY .
  • Mobility delivered consistent growth: service revenue +2.3% YoY, EBITDA +2.2% YoY, with 405k postpaid phone net adds; management underscored durable execution amid elevated switching .
  • Strategic spectrum acceleration: AT&T began deploying 3.45GHz mid-band via short-term lease, targeting coverage of nearly two-thirds of the U.S. population by mid-November; post-quarter PR highlights large-scale deployment and up to 80% faster downloads .

Management quotes:

  • “We’re winning the race to lead in convergence… we remain on track to achieve all of our 2025 consolidated financial guidance.” – John Stankey, CEO .
  • “We started deploying the 3.45 gigahertz spectrum… covering nearly two-thirds of the U.S. population by mid-November.” – John Stankey .
  • “We continue to expect full-year free cash flow in the low to mid-$16B range… and adjusted EPS closer to the high end of $1.97–$2.07.” – Pascal Desroches, CFO .

What Went Wrong

  • Business Wireline pressure: revenues -7.8% YoY; EBITDA -12.9% YoY; operating loss widened (margin -8.3%) due to secular declines, despite fiber connectivity growth .
  • Mobility margin compression: operating margin down 50bps and EBITDA margin down 40bps YoY, reflecting higher equipment, advertising/promotional costs, and depreciation .
  • Legal settlements and non-GAAP adjustments: ~$440M apportioned property and casualty settlements and adjustments tied to DIRECTV sale and other items impacting GAAP results (EPS $1.29 includes $0.79 DIRECTV gain; adjusted EPS $0.54) .

Financial Results

Consolidated performance (sequential trend)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Billions)$30.626 $30.847 $30.709
Diluted EPS ($)$0.61 $0.62 $1.29
Adjusted EPS ($)$0.51 $0.54 $0.54
Operating Income ($USD Billions)$5.754 $6.501 $6.119
Adjusted EBITDA ($USD Billions)$11.533 $11.731 $11.861
Cash from Operations ($USD Billions)$9.049 $9.763 $10.152
Free Cash Flow ($USD Billions)$3.146 $4.394 $4.865
Capital Expenditures ($USD Billions)$4.277 $4.897 $4.887

Actual vs S&P Global consensus

MetricQ1 2025Q2 2025Q3 2025
Adjusted EPS – Actual vs Consensus ($)$0.51 vs $0.515* $0.54 vs $0.530* $0.54 vs $0.538*
Revenue – Actual vs Consensus ($USD Billions)$30.626 vs $30.362* $30.847 vs $30.476* $30.709 vs $30.886*
Adjusted EBITDA – Actual vs Consensus ($USD Billions)$11.533 vs $11.320* $11.731 vs $11.601* $11.861 vs $11.742*

Notes:

  • Q3 2025: EPS beat (Adj. $0.54 vs $0.538*), EBITDA beat ($11.861B vs $11.742B*), revenue miss ($30.709B vs $30.886B*).*
  • Values marked with * are retrieved from S&P Global.

Year-over-year highlights (Q3 2025 vs Q3 2024)

MetricQ3 2024Q3 2025YoY Change
Revenue ($USD Billions)$30.213 $30.709 +1.6%
Adjusted EPS ($)$0.54 $0.54 Flat
Adjusted EBITDA ($USD Billions)$11.586 $11.861 +2.4%
Free Cash Flow ($USD Billions)$4.604 $4.865 +5.7%

Segment breakdown (revenues and margins)

Segment MetricQ1 2025Q2 2025Q3 2025
Mobility Revenues ($USD Billions)$21.570 $21.845 $21.713
Mobility EBITDA Margin (%)43.0% 43.4% 44.7%
Business Wireline Revenues ($USD Billions)$4.468 $4.313 $4.248
Business Wireline EBITDA Margin (%)31.3% 30.6% 27.8%
Consumer Wireline Revenues ($USD Billions)$3.522 $3.541 $3.555
Consumer Wireline EBITDA Margin (%)36.9% 36.5% 36.3%
Latin America Revenues ($USD Billions)$0.971 $1.054 $1.095
Latin America EBITDA Margin (%)19.9% 19.1% 18.2%

KPIs

KPIQ1 2025Q2 2025Q3 2025
Postpaid Phone Net Adds (000s)324 401 405
Postpaid Phone Churn (%)0.83% 0.87% 0.92%
Postpaid Phone ARPU ($)$56.56 $57.04 $56.64
Fiber Net Adds (000s)261 243 288
Internet Air Net Adds (000s)181 203 270
Broadband ARPU ($)$70.87 $71.16 $71.23
Fiber ARPU ($)$72.85 $73.26 $73.48

Guidance Changes

MetricPeriodPrevious Guidance (Q2 2025)Current Guidance (Q3 2025)Change
Consolidated Service Revenue GrowthFY2025Low-single-digit range Low-single-digit range Maintained
Mobility Service Revenue GrowthFY20253% or better 3% or better Maintained
Consumer Fiber Broadband Revenue GrowthFY2025Mid-to-high-teens Mid-to-high-teens Maintained
Adjusted EBITDA GrowthFY20253% or better 3% or better Maintained
Mobility EBITDA GrowthFY2025≈3% ≈3% Maintained
Business Wireline EBITDAFY2025Decline low-double-digits Decline low-double-digits Maintained
Consumer Wireline EBITDA GrowthFY2025Low-to-mid-teens Low-to-mid-teens Maintained
Capital Investment ($)FY2025$22–$22.5B $22–$22.5B Maintained
Free Cash Flow ($)FY2025Low-to-mid $16B Low-to-mid $16B Maintained
Adjusted EPS ($)FY2025$1.97–$2.07 (high end expected) $1.97–$2.07 (high end expected) Maintained
Share RepurchasesFY2025$4B $4B Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Convergence strategy (fiber+mobility)Q1: >4 in 10 fiber households also wireless; 261k fiber net adds . Q2: passed >30M locations; Internet Air >1M total; Lumen Mass Markets fiber deal announced .41% fiber households also mobility; 288k fiber and 270k Internet Air net adds; highest broadband net adds in 8 years .Strengthening
Spectrum deployment (EchoStar 3.45GHz)Q2 guidance update; acquisition announced Aug 26 2025 (post-Q2).Deployed via short-term lease; ~two-thirds population by mid-Nov.; post-quarter PR: ~23k sites, up to 80% faster downloads .Accelerating
Wireless competitive intensity & ARPUQ1: ARPU up 1.8%; churn 0.83% . Q2: ARPU up 1.1%; churn 0.87% .ARPU $56.64; churn 0.92%; mgmt leaning into underpenetrated segments and convergence discounts to maximize service revenue .Competitive pressure offset by strategy
Business Wireline transitionQ1: EBITDA margin 31.3%; secular declines . Q2: revenue -9.3% YoY; guidance low-double-digit EBITDA decline .Revenue -7.8% YoY; EBITDA -12.9%; early traction in fiber/fixed wireless; expect moderation vs last year .Gradual improvement in mix
Legal/settlement items & non-GAAPQ1: Adjusting items (restructuring, legal) . Q2: Adjusting items .~$440M apportioned property & casualty settlements; DIRECTV sale gain impacting GAAP EPS .One-off items managed
Innovation & AI experiences–Connectopia AI-driven fan experience powered by fiber/5G launched at Intuit Dome (Oct 24) .Brand/enterprise innovation

Management Commentary

  • Strategy: “We have the key building blocks in place… we’re winning the race to lead in convergence.” – John Stankey .
  • Fiber & fixed wireless: “Where we have fiber, we win… we plan to win even more as our investments… bring advanced connectivity to more Americans.” – John Stankey .
  • Spectrum rollout: “We started deploying the 3.45 gigahertz spectrum… covering nearly two-thirds of the U.S. population by mid-November.” – John Stankey .
  • Margins & efficiency: “We continue to expect overall company margin expansion… less copper… wireless modernization substantially complete by end of 2027.” – Pascal Desroches .
  • Capital returns & FCF: “We… settled some out-of-pattern legal settlements that will impact our Q4 FCF by ~half a billion… continue to expect FY FCF low-to-mid $16B and adjusted EPS closer to the high end.” – Pascal Desroches .

Q&A Highlights

  • Fiber build & competition: Management emphasized scaled, agile build engine and deliberate capital allocation to discourage overbuilds; DSL base being transitioned to fixed wireless in non-fiber areas .
  • Internet Air & segmentation: Top-of-funnel “AT&T Internet” messaging, geo-targeted digital offers; avoid FWA in fiber footprints; ramping third-party distribution for SMB to improve mix .
  • Wireless promos & ARPU: Strategy prioritizes converged customers; ARPU pressure is “a feature” of expanding into underpenetrated segments with high LTV; price actions when value increases .
  • Inorganic M&A stance: Focused on organic execution; current asset base sufficient; leadership focused internally, not external deals .
  • Echo/Lumen accretion: Conservative modeling affirmed; wholesale migration (Boost) supports incremental accretion; spectrum defers capex splits/augments, accelerates Internet Air .
  • LEO satellites: Viewed as complementary; AT&T as integrator; hybrid networks with dense fiber likely to maintain performance/cost advantage .

Estimates Context

  • Q3 2025 EPS: Actual adjusted $0.54 vs consensus $0.538* – beat by ~$0.002 .*
  • Q3 2025 Revenue: Actual $30.709B vs consensus $30.885B* – miss by ~$0.176B .*
  • Q3 2025 Adjusted EBITDA: Actual $11.861B vs consensus $11.742B* – beat by ~$0.119B .*
  • Sequentially, actual results were broadly in line with steady execution; guidance implies Q4 FCF ≈$4B despite legal cash settlements .*

Values marked with * are retrieved from S&P Global.

Key Takeaways for Investors

  • Convergence flywheel is working: fiber and Internet Air momentum, rising convergence rates, and low-churn, high-LTV cohorts should underpin service revenue durability .
  • Expect margin expansion medium term as copper retirement and wireless modernization drive structural cost takeout; near-term mobility margins pressured by acquisition costs and device mix .
  • Business Wireline mix shift in progress: legacy declines persist, but fiber/advanced connectivity revenue growth is accelerating; monitor EBITDA decline moderation into Q4 .
  • Non-GAAP adjustments matter: DIRECTV sale inflated GAAP EPS; legal settlements accrued in Q3 with ~$0.5B cash outflow in Q4; focus on adjusted metrics and FCF trajectory .
  • Spectrum deployment is a real catalyst: rapid mid-band rollout boosts capacity/speeds and capital efficiency, supporting Internet Air expansion and wholesale economics .
  • Guidance intact with positive bias: reiterated 2025 outlook, CFO signaling high end of EPS range; watch Q4 capex ($7–$7.5B) and FCF delivery (~$4B) .
  • Near-term trading: modest revenue miss vs consensus offset by EPS/EBITDA beats and confident guidance; spectrum deployment and convergence progress are constructive for sentiment .