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    T
    Earnings call· Jun 2026(Q2 FY26)

    AT&T INC. T

    Jul 22, 2026 Source

    Executive summary

    AT&T Q2 FY26 — Accelerated Growth and Strategic Execution

    AT&T delivered accelerated growth in Q2 FY26, driven by strong subscriber additions across fiber, fixed wireless, and postpaid phones, alongside robust financial performance. The company's convergence strategy and fiber expansion, including the integration of Lumen assets, are key to its operating momentum. Strategic investments in AI-driven connectivity and the ongoing wind-down of legacy copper networks position AT&T for future demands, while capital allocation prioritizes shareholder returns through accelerated share repurchases.

    Highlights

    5

    • Gained over 1 million advanced connectivity subscribers (fiber, fixed wireless, and postpaid phones) with higher net additions year-over-year.

    • Achieved best ever Q2 for AT&T fiber net adds and a record quarter for combined fiber and fixed wireless net adds.

    • Consolidated adjusted EBITDA grew 5.2% year-over-year, with margin increasing 110 basis points to 39.1%.

    • Adjusted EPS increased over 20% year-over-year to $0.65.

    • Increased planned share repurchases for FY26 by 25% to approximately $10 billion.

    Concerns

    3

    • Fiber ARPU declined 1.3% year-over-year, primarily due to the full quarter impact of the Lumen transaction.

    • Legacy segment service revenues declined 26% year-over-year and EBITDA declined about 46%.

    • Net debt to adjusted EBITDA is expected to increase to the 3.2x range following the EchoStar spectrum acquisition.

    Guidance & targets

    10
    CategoryTargetConfidence
    Advanced Connectivity business service revenues CAGR
    low single-digit CAGR
    medium materiality
    High
    Consolidated service revenues growth
    low single-digit range
    high materiality
    High
    Consolidated adjusted EBITDA growth
    3% to 4% range
    high materiality
    High
    Adjusted EPS
    $2.25 to $2.35
    high materiality
    High
    Free cash flow
    $18 billion plus
    high materiality
    High
    Capital investment
    $23 billion to $24 billion
    high materiality
    High
    Advanced Connectivity service revenue growth
    5% plus
    high materiality
    High
    Advanced Connectivity EBITDA growth
    6% plus
    high materiality
    High
    Net leverage ratio
    3.2x range
    high materiality
    High
    Net leverage ratio target
    2.5x range
    high materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Consolidated
    Total revenues driven by service revenue growth of 2.7%. Adjusted EBITDA up 5.2% year-over-year, with margin increasing 110 basis points.
    		up 2.3%2.3%—39.1% adjusted EBITDA margin
    Advanced Connectivity
    Service revenues accelerated by 150 basis points compared to Q1. EBITDA grew faster than revenue due to top-line momentum and cost transformation initiatives. Wireless service revenues grew 3.3% YoY. Fiber net adds exceeded 1 million locations. Business segment has 'turned the corner' and is expected to be a growth driver.
    Postpaid phone net adds: 432,000Consumer postpaid wireless accounts added: 147,000Advanced Home Internet service revenues growth: >27%Fiber ARPU decline: 1.3% YoYFiber ARPU (ex-Lumen): approximately flat YoYConverged customers (advanced home internet + postpaid wireless): 42.5%Converged customers (ex-Lumen): 45%Advanced Connectivity business service revenues growth: 1.8% YoY
    		—5.1% service revenues—8% EBITDA growth
    Legacy Segment
    Declines reflect the acceleration of powering down the legacy copper network and migrating customers to more advanced services.
    		—-26% service revenues—-46% EBITDA

    Operational metrics

    7
    Adjusted EPS
    $0.65up >20% from $0.54 prior year
    Q2 FY26

    Driven primarily by growth in adjusted EBITDA and lower depreciation expense.

    Capital investment
    $6.1Bvs $5.1B a year ago
    Q2 FY26

    Contributed to higher capital investment as pace of fiber deployment accelerated.

    Annual cost savings target
    $4B
    annual

    On pace to achieve target through cost transformation initiatives.

    Wire centers with approval to discontinue legacy services
    >30%
    current

    Progress on exiting legacy copper network.

    Wire centers with 0 customers
    couple of hundred
    by year-end

    Expected by year-end as part of copper network wind-down.

    Converged gross adds growth in Lumen territories
    45%compared to February
    June

    Demonstrates successful application of convergence playbook in acquired footprint.

    Fiber expansion locations
    8M
    FY26

    Largest year ever for fiber expansion.

    Industry KPIs

    5
    MetricValueDetails
    Postpaid arpa vs ARPU—
    Postpaid phone net adds432,000net adds
    Broadband fwa net adds split>1 millionsubscribers
    Share buyback capital returned$2.2 billionUSD
    Net debt EBITDA deleveraging path2.68xx

    Product announcements

    1
    ProductTypeDetails
    Satellite-based coverage (via AST SpaceMobile)launch

    Deals & partnerships

    1
    EchoStarAcquisition of spectrum licenses

    The acquisition allows AT&T to control its spectrum destiny for the next several years, especially given delays in C-band auctions.

    Risks & headwinds

    3
    Fiber ARPU pressure from converged offersnear term

    Fiber ARPU declined 1.3% YoY

    Mitigation: Focus on growing converged customer accounts, which enjoy discounted pricing but typically stay longer and increase spending over time; manage back book pricing; maximize total Advanced Connectivity service revenues.

    Legacy segment declineongoing

    Service revenues declined 26% YoY, EBITDA declined 46% YoY

    Mitigation: Accelerate the process of powering down the legacy copper network and migrate customers to more advanced and reliable voice and Internet services; complete network modernization and other transformation initiatives.

    Increased leverage post-EchoStar acquisitionfollowing close of transaction

    Net debt to adjusted EBITDA expected to increase to 3.2x range

    Mitigation: Commitment to reduce balance sheet leverage, targeting 2.5x range within approximately 3 years following the close of the EchoStar transaction.

    What to watch in Q3 FY26

    5

    Fiber ARPU trajectory

    next quarter
    Currentdeclined 1.3% YoY (flat ex-Lumen)
    Targetstabilization or growth

    Why it matters

    Indicates the effectiveness of managing pricing for converged customers and the overall profitability of the fiber business.

    In the near term, this will likely put some pressure on fiber ARPU, but we feel really good about our ability to manage our back book pricing as we grow our base of fiber customers that also subscribe to our wireless services.

    Q&A highlights

    6

    Can you elaborate on the success of new plans like Build-a-Plan and OneConnect, the balance between fiber volume and pricing, and how satellite might impact rural markets?

    Management stated new plans contributed to a 3-year high in new account additions by targeting value segments effectively. Fiber strategy is aggressive across price points, optimizing for converged accounts. Satellite could help shrink terrestrial footprint in 'poverty sites' in rural areas, allowing AT&T to focus on its owned/operated network for 98% of traffic.

    “So my point of view is it's a really important tool in the portfolio. But with -- to your point, you always want to be prioritizing your scarce spectrum resources that I just talked about in the answer to the previous question with John, to use it for mobility. The answer is yes. And I never want to compromise buying the next opportunity for a mobile service at the expense of serving Netflix in a fixed location.”

    asked by Sean Diffley · answered by John Stankey

    2 min read6 chapters

    Detailed Narrative

    01

    Subscriber Growth & Convergence Momentum

    AT&T gained over 1 million advanced connectivity subscribers in Q2 FY26, encompassing fiber, fixed wireless, and postpaid phones, with all three categories showing year-over-year net add increases. The company achieved its best-ever second quarter for AT&T fiber net adds and a record for combined fiber and fixed wireless net adds. The converged customer base continues to grow, with 42.5% of advanced home internet customers also having a postpaid wireless account (45% excluding acquired Lumen footprint), indicating strong cross-selling success.

    02

    Fiber Expansion & Lumen Integration

    The company is undertaking its largest year ever for fiber expansion, planning to reach 8 million new locations, including over 4 million acquired from Lumen. Integration of the Lumen footprint is progressing, with June converged gross adds in these territories up 45% compared to February. This demonstrates the effectiveness of AT&T's convergence playbook in underpenetrated areas, with further acceleration expected as branding and support systems are fully converted.

    03

    AI-Driven Connectivity and Network Investment

    AT&T is positioning its network for the future demands of AI, noting that Agentic AI generates up to 450% more traffic per task and is projected to drive 9x growth in enterprise traffic and 7x in consumer traffic by 2035. The company believes its fiber-enabled network convergence at the edge, combined with robust upstream wireless capabilities (enhanced by 600MHz spectrum), will create a competitive advantage for low-latency, high-bandwidth connectivity required by emerging AI use cases.

    04

    Copper Network Wind-down Acceleration

    Momentum picked up in exiting inefficient copper-based services, aided by positive FCC actions. The FCC granted permission to discontinue legacy copper voice service in approximately 60% of AT&T's wire centers in California. More broadly, over 30% of wire centers nationwide have approval to discontinue legacy services by late 2026, with a couple of hundred expected to have zero customers by year-end, putting the goal of an orderly copper turndown by the end of the decade firmly in sight.

    05

    Capital Allocation & Share Repurchases

    AT&T returned $4.1 billion to shareholders in Q2 FY26, including $2.2 billion in share repurchases. The company increased its planned share repurchases for FY26 by 25% to approximately $10 billion, pulling forward planned buybacks through 2028. Total planned share repurchases and expected dividend payments for the year are projected to be $18 billion, essentially 100% of the free cash flow outlook, reflecting confidence in operating fundamentals and a view of undervalued stock.

    06

    CFO Transition

    Pascal Desroches announced his retirement at the end of the year. Jennifer Biry will return to AT&T as CFO, with a deliberate and planned transition underway. Management expressed confidence in Biry's ability to seamlessly take over, citing her familiarity with the team and business, and her understanding of software-driven enterprises.

    AI-generated summary of the company’s earnings call. Not investment advice.