AT&T (T)·Q4 2025 Earnings Summary

AT&T Beats on Revenue and EPS, Guides to $45B+ Shareholder Returns Through 2028

January 28, 2026 · by Fintool AI Agent

AT&T delivered a solid beat on Q4 2025 results, reporting revenue of $33.5 billion (+3.6% YoY) and adjusted EPS of $0.52—exceeding Wall Street estimates of $32.9B and $0.47, respectively . The telecom giant also announced an ambitious long-term outlook, targeting $45B+ in shareholder returns through 2028 via dividends and buybacks, and projecting double-digit adjusted EPS CAGR through 2028 .

Shares jumped ~3.5% in after-hours trading to $23.79 following the report, reversing the stock's 2% decline during the regular session .

Did AT&T Beat Earnings?

Yes—AT&T beat on both revenue and EPS.

This marks AT&T's fourth consecutive quarter of beating adjusted EPS estimates. The beat was driven by:

• Mobility momentum: Service revenues of $17.0B grew 2.4% YoY
• Fiber strength: Consumer Wireline fiber revenues of $2.2B jumped 13.6% YoY
• Cost discipline: Operating expenses increased only 2.6% despite 3.6% revenue growth

What Did Management Guide?

AT&T provided a comprehensive three-year outlook that exceeded expectations:

2026 Guidance

Long-Term Targets (2026-2028)

• Free Cash Flow: $18B+ (2026) → $19B+ (2027) → $21B+ (2028)
• Adjusted EPS: Double-digit 3-year CAGR through 2028
• EBITDA Growth: 3-4% in 2026, improving to 5%+ by 2028
• Total Shareholder Returns: $45B+ through dividends and buybacks (~30% of market cap, 75%+ of expected FCF)
• Dividend: Maintained at $1.11 annually
• Net Leverage Target: 2.5x within ~3 years of closing acquisitions

Service Revenue Outlook

How Did the Stock React?

AT&T shares closed at $23.00 on January 27, down 2.1% ahead of the report. Following the earnings release and call, the stock rallied +3.8% to $23.89, extending gains from initial after-hours trading.

*As of market close January 28, 2026.

The positive reaction reflects relief on guidance strength—the $2.25-$2.35 EPS range for 2026 compares favorably to consensus expectations of $2.25. Investors also responded favorably to the $45B+ shareholder return commitment and double-digit EPS CAGR target through 2028 .

What Changed This Quarter?

New Segment Reporting

Beginning Q1 2026, AT&T will reorganize into three segments :

1. Advanced Connectivity (~90% of 2025 revenue, 95%+ of EBITDA) — 5G/fiber-based wireless and internet services
2. Legacy — Copper-based voice/data services (being phased out by 2029)
3. Latin America — Mexico wireless business (unchanged)

This restructuring reflects AT&T's strategic pivot away from legacy copper infrastructure toward converged 5G and fiber services. Management highlighted that Advanced Connectivity EBITDA grew at 6%+ annually over the past two years vs. 3% consolidated—the new reporting will provide better visibility into returns on growth investments .

Key Strategic Moves

• Lumen Acquisition: Substantially all of Lumen's Mass Markets fiber business expected to close early 2026, adding ~$900M annualized fiber revenues
• EchoStar Spectrum: Wireless spectrum licenses from EchoStar closing early 2026
• Copper Exit: FCC approved discontinuing copper in 30%+ of wire centers by end of 2026; target is large majority by end of 2029

Fiber Expansion Acceleration

Convergence Strategy Paying Off

AT&T's convergence rate (fiber customers also using AT&T wireless) reached 42% , driving:

• Highest customer satisfaction scores for subscribers with both wireless and internet connectivity
• Best year for consumer broadband subscriber growth in a decade
• 8th consecutive year of 1M+ AT&T Fiber net adds

Key Segment Performance

Mobility

Postpaid phone net adds of 421K exceeded guidance but reflected seasonal normalization. Churn ticked up to 0.98% from 0.85% a year ago—worth monitoring but still industry-leading.

Consumer Wireline (Fiber)

Consumer Wireline was the standout, with operating income nearly doubling YoY as fiber scale drives margin expansion.

Business Wireline

Business Wireline remains challenged by legacy service declines, but fiber/advanced connectivity growth of 6.8% is accelerating the transition.

Full-Year 2025 Results

AT&T met or exceeded all 2025 consolidated guidance .

Capital Allocation

AT&T's capital return story is strengthening:

The Board approved a new $10B share repurchase authorization to follow the current $10B program expected to complete in 2026 .

Key Management Quotes

"In my career, I've never seen federal policy this supportive of market-based investment in advanced networks. This welcome policy stance has been adopted at the front end of an AI revolution that we expect to increase the need for dense fiber networks and more symmetrical connectivity into and out of homes, businesses, and devices."

— John Stankey, AT&T Chairman and CEO

"We're in a distinctly different place than cable. We currently sit under their pricing umbrella... they're priced higher and their product's inferior, and so they're the ones that's having to readjust to the market, not us. We've got the better product, and we're priced lower."

— John Stankey, on competitive positioning

"I feel like we're entering the fun cycle here, in what's been a bit of a slog over the last couple of years to get us in a position to do these kinds of things."

— John Stankey, on AT&T's strategic position

Q&A Highlights

The Q&A session provided valuable color on management's expectations and strategic priorities:

Fiber Convergence Trajectory

Question (John Hodulik, UBS): Where do you expect fiber convergence rate to get over time?

John Stankey: "We have an objective... we're gonna drive that to 50% and feel very comfortable with that. I don't expect it to stop there... looking in the rearview mirror on history, and you look at what bundled rates were when there were other compelling bundles in the market... we approached periods of time where 80% of consumers were bundling."

Management signaled 50% is the near-term target, with long-term potential of 70-80% as the industry structurally shifts toward converged providers.

Lumen Integration Outlook

John Stankey: "We expect Lumen to be derated a bit in what I would call terminal penetration... but if it's not, and we actually perform equal to what we do within our current footprint, that's gonna be upside in terms of our business case."

Key Lumen metrics to watch:

• Current fiber penetration: ~25% (vs. AT&T's 40%)
• Current AT&T wireless attach rate: ~20% (vs. 42% in AT&T footprint)
• Integration timeline: "Record time" closing expected in Q1 2026

Spectrum Strategy Post-EchoStar

Question (Benjamin Swinburne, Morgan Stanley): Any envelope for additional spectrum investments?

John Stankey: "By doing this transaction, I viewed it as preemptive and opportunistic for us... the industry is lining up where there's particular spectrum bands that are most useful to particular players in the industry... we can all pick our moments when it's appropriate to go visit the buffet."

Management indicated capacity has been reserved for future spectrum but expects a more disciplined, less competitive auction environment.

Foldable iPhone Impact

John Stankey: "There are foldable devices in the market today... the indications in the market would be that that's not a broadly applicable form factor... I don't think this is gonna be the kind of thing where 80% of the base says they need that form factor."

Guidance does not assume a meaningful upgrade cycle catalyst from foldable devices.

2026 Seasonality Warning

John Stankey: "There'll be better volumes in the second half of the year than the first half... Third quarter will be better than fourth quarter... we have a ramping dynamic we're gonna be working through... you should expect we're going to be on probably a solid 2-quarter ramp here of getting ourselves up the learning curve."

Management explicitly guided to Q1 EBITDA growth below full-year run rate and FCF of $2.0-2.5B (vs. $18B+ full-year target).

Cost Savings Acceleration

Pascal Desroches: "We expect the next three years to save more than $4 billion in cost... it's a muscle we have built, and I feel really good about our ability to do so."

John Stankey: "We're getting very large increases in our productivity for the software we're developing and writing right now... we're getting more done... I keep turning over rocks and seeing more opportunities to go after things."

Risks and Concerns

1. Leverage post-acquisitions: Net debt-to-EBITDA expected to rise to ~3.2x following Lumen/EchoStar deals before declining to ~3x by year-end 2026

2. Churn pressure: Postpaid phone churn increased 13 bps YoY to 0.98%—still low, but trending in the wrong direction

3. Regulatory risk: California regulators could delay copper network decommissioning beyond 2029

4. Acquisition dilution: Lumen/EchoStar deals expected to be "modestly dilutive" to adjusted EPS in 2026-2027, accretive in 2028

Forward Catalysts

• Q1 2026: Lumen and EchoStar acquisitions expected to close
• Q1 2026: New segment reporting structure begins
• 2026: ~$8B share repurchase execution
• 2028: EPS accretion from acquisitions; EBITDA growth accelerating to 5%+
• 2029: Substantial completion of legacy copper exit

The Bottom Line

AT&T delivered a clean beat with strong guidance. The $45B+ shareholder return commitment through 2028 and double-digit EPS CAGR target signal management confidence in the business transformation. Key debates going forward: Can fiber/5G convergence offset accelerating legacy declines? Will the Lumen integration go smoothly? Is churn pressure a temporary blip or emerging trend?

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Data as of January 28, 2026. Values retrieved from S&P Global where citations not provided.

Related:

• AT&T Company Research
• AT&T Q4 2025 Earnings Call Transcript
• AT&T Q3 2025 Earnings Recap