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AT&T INC. (T)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 delivered modest topline growth ($32.30B, +0.9% YoY), adjusted EPS of $0.54, and adjusted EBITDA of $10.79B; AT&T met all 2024 consolidated guidance and reiterated 2025 guidance (Adj. EPS ex-DIRECTV $1.97–$2.07; FCF ex-DIRECTV $16B+) .
  • Operating momentum was driven by Mobility service revenue (+3.3% YoY), industry‑leading churn, and record Q4 Mobility EBITDA; Consumer Wireline posted 17.8% YoY fiber revenue growth with 307K fiber net adds, while Business Wireline remained a secular headwind (rev −10% YoY) .
  • Balance sheet and cash priorities intact: net debt/Adj. EBITDA targeted ~2.5x in H1’25, enabling share repurchases in H2’25 under an initial ~$10B authorization as part of a $40B+ three‑year capital return framework; AT&T also executed an $850M structured sale‑leaseback to monetize legacy real estate .
  • Management maintained all 2025 financial/operational guidance and highlighted regulatory progress to accelerate copper decommissioning, AI‑enabled cost savings toward a $3B+ run‑rate by 2027, and continued investment (~$22B capex) in 5G and fiber as key multi‑year catalysts .

What Went Well and What Went Wrong

  • What Went Well

    • Mobility resilience: service revenue +3.3% YoY; Q4 Mobility EBITDA +6.1% YoY to a highest‑ever Q4 level; postpaid phone churn 0.85% and phone ARPU +0.9% YoY .
    • Fiber flywheel: 307K fiber net adds, broadband revenue +7.8% YoY, fiber ARPU $71.71 (+4.7% YoY); six consecutive quarters of positive broadband net adds .
    • Strategic/financial positioning: reiterated 2025 guidance (Adj. EPS ex‑DIRECTV $1.97–$2.07; FCF ex‑DIRECTV $16B+), H1’25 leverage target ~2.5x permitting H2’25 buybacks; sale‑leaseback yields $850M cash and future revenue‑share optionality .
    • Management quotes: “We ended 2024 with strong momentum… and begin share repurchases in the second half of the year.” — CEO John Stankey . “Adjusted EPS was $0.54… fourth quarter free cash flow was $4.8B… we achieved all our consolidated financial guidance.” — CFO Pascal Desroches .

  • What Went Wrong

    • Business Wireline remains a drag: revenue −10.0% YoY; EBITDA −22% YoY with margin compression; management expects mid‑teens EBITDA decline in 2025 .
    • Higher D&A and network costs: operating expenses rose on Open RAN modernization (accelerated depreciation), fiber build, storm impacts; Q4 capex jumped to $6.8B (capital investment $7.1B) .
    • Free cash flow cadence: Q4 FCF $4.8B (vs. $6.4B prior‑year) as FCF becomes more ratable; reported churn ticked up 1bp YoY in postpaid phone (0.85%) .

Financial Results

MetricQ2 2024Q3 2024Q4 2024
Revenue ($B)$29.80 $30.21 $32.30
Diluted EPS (GAAP)$0.49 $(0.03) $0.56
Adjusted EPS ($)$0.57 $0.60 $0.54
Adjusted EBITDA ($B)$11.34 $11.59 $10.79
Adjusted Op. Income Margin (%)21.1% 21.6% 16.8%
Adjusted EBITDA Margin (%)38.0% 38.3% 33.4%
Cash from Ops ($B)$9.09 $10.24 $11.90
Capital Expenditures ($B)$4.36 $5.30 $6.84
Free Cash Flow ($B)$4.58 $5.10 $4.83

Segment performance (Revenue and EBITDA):

SegmentQ2 2024 Revenue ($B)Q2 2024 EBITDA ($B)Q3 2024 Revenue ($B)Q3 2024 EBITDA ($B)Q4 2024 Revenue ($B)Q4 2024 EBITDA ($B)
Mobility$20.48 $9.20 $21.05 $9.49 $23.13 $8.89
Business Wireline$4.76 $1.49 $4.61 $1.36 $4.55 $1.20
Consumer Wireline$3.35 $1.10 $3.42 $1.12 $3.47 $1.22
Latin America (Mexico)$1.10 $0.18 $1.02 $0.17 $1.04 $0.17

Key KPIs

KPIQ2 2024Q3 2024Q4 2024
Postpaid phone net adds (000s)419 403 482
Postpaid phone churn (%)0.70% 0.78% 0.85%
Postpaid phone ARPU ($)$56.42 $57.07 $56.72
Fiber net adds (000s)239 226 307
Broadband revenue ($B)$2.741 $2.838 $2.911
Fiber ARPU ($)$69.00 $70.36 $71.71
Capital investment ($B)$4.91 $5.48 $7.06
Free cash flow ($B)$4.58 $5.10 $4.83

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Consolidated service revenue growthFY 2025Low‑single‑digit (Analyst Day) Low‑single‑digit Maintained
Mobility service revenue growthFY 2025High end of 2%–3% High end of 2%–3% Maintained
Consumer fiber broadband revenue growthFY 2025Mid‑teens Mid‑teens Maintained
Adjusted EBITDA growthFY 2025≥3% ≥3% Maintained
Mobility EBITDA growthFY 2025High end of 3%–4% High end of 3%–4% Maintained
Business Wireline EBITDAFY 2025Mid‑teens decline Mid‑teens decline Maintained
Consumer Wireline EBITDAFY 2025High‑single to low‑double‑digit growth High‑single to low‑double‑digit growth Maintained
Capital investmentFY 2025~$22B ~$22B Maintained
Free cash flow (ex‑DIRECTV)FY 2025$16B+ $16B+ Maintained
Adjusted EPS (ex‑DIRECTV)FY 2025$1.97–$2.07 $1.97–$2.07 Maintained
Net debt/Adj. EBITDAH1 2025~2.5x ~2.5x Maintained
Quarterly dividend per common shareOngoing$0.2775 $0.2775 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q‑2 and Q‑1)Current Period (Q4 2024)Trend
AI/automation and cost takeoutCost discipline and improving margins highlighted in prior quarters New $3B+ run‑rate cost savings target by 2027; broader AI integration across ops; call center volumes −30% YoY via AI; code productivity gains Improving
Network modernization (Open RAN)Ongoing modernization; capex heavy, transformation offsets Higher D&A tied to Open RAN elevated opex; still investing ~$22B in 2025 Ongoing investment with cost headwinds
Copper decommissioning/regulatoryLegacy secular declines acknowledged FCC approval to start discontinuing legacy voice in select wire centers; plan to file ~1,300 wire centers imminently Positive regulatory momentum
Convergence (fiber + wireless)Converged momentum; 4/10 fiber households also wireless (noted intra‑year) Converged strategy reinforced; low churn, fiber penetration and cross‑sell benefits sustained Improving
Macro/policy (tax incentives)Not a focal point in Q2/Q3 pressersIf expiring tax incentives are extended, AT&T could accelerate fiber build; potential ramp by 1M build increments over 12–18 months Potential upside
Product performance: Fiber & AIAFiber net adds 239K (Q2), 226K (Q3); AIA traction Fiber net adds 307K; AIA +158K; fiber ARPU $71.71 Improving
MexicoMixed trend; FX impact mentioned in Q3 Q4 rev −4.2% YoY on FX; EBITDA +24.8% YoY; positive operating income Mixed: FX headwind, profitability up
Business WirelineDeclines persisted Q2/Q3 −10% rev; 2025 EBITDA decline mid‑teens guided Deteriorating structurally

Management Commentary

  • Strategy and capital returns: “We ended 2024 with strong momentum… expand the country's largest fiber network, modernize our wireless network, grow our business and begin share repurchases in the second half of the year.” — CEO John Stankey .
  • 2025 priorities: “We anticipate capital investment in the $22 billion range… expect to achieve our target of net debt to adjusted EBITDA in the 2.5x range in the first half… commence common stock repurchases… ~$10 billion during the second half of 2025.” — CEO John Stankey .
  • Cost savings and AI: “We established a new $3 billion plus run rate cost savings target… in 2025, we'll make progress by further integrating AI throughout our operations.” — CEO John Stankey .
  • Financial wrap: “Adjusted EPS was $0.54… fourth quarter free cash flow was $4.8 billion… For the full year, we achieved all our consolidated financial guidance.” — CFO Pascal Desroches .
  • Business Wireline outlook: “For the full year, Business Wireline EBITDA declined 18%… For full year 2025, we expect Business Wireline EBITDA to decline in the mid‑teens range.” — CFO Pascal Desroches .

Q&A Highlights

  • Copper decommissioning/regulatory process: Management will file to stop selling legacy products in ~1,300 wire centers as a first large-scale step; savings are embedded in long‑term targets and phase in over years, not quarters .
  • Tax policy optionality: Extension of tax incentives could accelerate fiber build (increments of ~1M passings over 12–18 months); balance between investment and capital returns .
  • Mobility market normalization: Expect continued normalization of net adds in 2025; balance between volume growth and ARPU; reseller gains benefited from DISH migration and other MVNOs .
  • Fiber competition and ARPU: Management confident on ARPU trajectory despite cable promotions; pricing actions, mix shift to fiber, and product superiority cited as drivers .
  • AI deployment: Tangible gains in contact centers (−30% call volumes YoY) and network optimization; plans to deepen data‑driven go‑to‑market in 2025 .

Estimates Context

  • S&P Global (Capital IQ) consensus estimates for Q4 2024 EPS and revenue were unavailable due to provider request limits at query time; as a result, we cannot present formal beat/miss versus Wall Street. Values were not retrievable from S&P Global at the time of this analysis (Values retrieved from S&P Global).
  • Management emphasized that full‑year 2024 results met all consolidated financial guidance and reiterated 2025 targets, implying limited need for near‑term estimate revisions at the consolidated level; Business Wireline remains a likely source of downward estimate pressure at the segment level given the guided mid‑teens EBITDA decline in 2025 .

Key Takeaways for Investors

  • Core engine intact: Mobility and Fiber continue to compound (service revenue +3.3% YoY; 307K fiber net adds; broadband revenue +7.8% YoY), supporting sustainable EBITDA growth into 2025 despite Business Wireline headwinds .
  • Cash and leverage trajectory supportive of buybacks: H1’25 leverage targeting 2.5x, enabling H2’25 repurchases ($10B initial) within a $40B+ multi‑year capital return framework; sale‑leaseback adds $850M cash and future economics .
  • 2025 setup: Guidance maintained across revenue, EBITDA, capex (~$22B), and FCF ex‑DIRECTV ($16B+), reinforcing visibility; watch transition to FCF and EPS metrics excluding DIRECTV for comparability .
  • Execution watch‑items: Track Mobility churn/ARPU trends as device cycles normalize; monitor fiber ARPU/pricing actions amid cable promos; observe AI‑driven opex benefits against elevated D&A from Open RAN .
  • Structural drag: Business Wireline secular decline persists (−10% rev YoY; 2025 EBITDA decline mid‑teens), but fiber‑led growth and cost actions should offset at the consolidated level over time .
  • Regulatory/tax optionality: Accelerated copper shutdowns and potential tax incentive extensions could pull forward fiber economics and returns; filings in ~1,300 wire centers are a near‑term milestone .
  • Trading lens: With catalysts including H2’25 buybacks, potential tax‑policy upside, and continued converged subscriber momentum, near‑term sentiment is likely tied to FCF cadence and sustained Mobility/Fiber execution versus lingering Business Wireline pressure .

Additional Relevant Press Releases (Q4 context)

  • Structured sale‑leaseback: $850M upfront proceeds from 74 properties; monetizes legacy central offices while preserving network operations and sharing in redevelopment upside .
  • Dividend continuity: Declared common dividend per quarter of $0.2775 reflected in supplemental data .