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    T
    Earnings call· Sep 2025(Q3 FY25)

    AT&T INC. T

    Oct 22, 2025 Source

    Executive summary

    AT&T Q3 FY25 — Strong Broadband Growth and Strategic Network Investments

    AT&T delivered a solid quarter, driven by robust broadband subscriber growth, particularly in fiber and fixed wireless, and continued postpaid phone net adds. The company is strategically investing in network modernization and key acquisitions to enhance its converged offerings and drive long-term organic growth. Management remains focused on internal execution and leveraging its asset base to become a leading advanced communications provider.

    Highlights

    5

    • Achieved over 550,000 new subscribers to advanced broadband services (Fiber and Internet Air) in Q3, marking the highest total broadband net adds in over 8 years.

    • Delivered 405,000 postpaid phone net adds in Q3, slightly ahead of the prior year's performance.

    • Consumer Wireline EBITDA grew more than 15% year-over-year in Q3, with EBITDA margins expanding by 350 basis points.

    • Ended Q3 with net debt to adjusted EBITDA of 2.59x, down from 2.64x last quarter, reflecting strong cash generation.

    • Successfully deployed 3.45 GHz EchoStar spectrum in cell sites covering nearly 2/3 of the U.S. population by mid-November, ahead of transaction close.

    Concerns

    5

    • Postpaid phone churn increased to 0.92% in Q3, up 14 basis points versus a year ago, reflecting elevated marketplace activity and device financing periods.

    • Mobility EBITDA growth of 2.2% in Q3 was impacted by approximately 100 basis points due to a one-time service revenue item in the prior year.

    • Business Wireline revenues declined 7.8% year-over-year in Q3, with EBITDA declining about 13% due to structural declines in legacy services.

    • Postpaid phone ARPU of $56.64 was essentially consistent with a year ago (normalized), impacted by success in attracting lower ARPU segments and converged offers.

    • Higher equipment costs and other acquisition-related expenses drove an increase in total Mobility operating expenses year-over-year.

    Guidance & targets

    17
    CategoryTargetConfidence
    Full-year service revenue growth
    low single-digit range
    high materiality
    High
    Full-year adjusted EBITDA growth
    3% or better
    high materiality
    High
    Full-year free cash flow
    low to mid $16 billion range
    high materiality
    High
    Full-year capital investment
    $22 billion to $22.5 billion range
    high materiality
    High
    Full-year adjusted EPS
    $1.97 to $2.07
    high materiality
    High
    Mobility service revenue growth
    3% or better
    medium materiality
    High
    Mobility EBITDA growth
    approximately 3%
    medium materiality
    High
    Consumer fiber broadband revenue growth
    mid- to high teens
    medium materiality
    High
    Consumer Wireline EBITDA growth
    low to mid-teens range
    medium materiality
    High
    Business Wireline EBITDA decline
    low double-digit range
    medium materiality
    High
    Pension plan contributions
    $1.5 billion
    medium materiality
    High
    Lumen transaction close
    early part of 2026
    high materiality
    High
    EchoStar spectrum deployment coverage
    nearly 2/3 of the U.S. population
    medium materiality
    High
    Internet Air expansion
    further expand availability
    low materiality
    Medium
    Fiber locations passed
    more than 60 million customer locations
    high materiality
    High
    Long-term financial outlook update
    provide an update
    high materiality
    High
    Mobility network modernization
    substantially complete
    medium materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Mobility
    Service revenue growth contributed to EBITDA growth, though prior year included $90M one-time revenue impacting reported growth rates. Churn increased due to marketplace activity and device financing periods. ARPU consistent YoY (normalized), impacted by attracting lower ARPU segments and converged offers.
    Postpaid phone net adds: 405,000Postpaid phone churn: 0.92%Postpaid phone ARPU: $56.64
    		—2.3%—2.2% EBITDA growth
    Consumer Wireline
    Strong growth driven by fiber and Internet Air customer additions. EBITDA margins expanded by 350 basis points due to top-line growth and cost takeouts from legacy copper network reduction. Convergence rate with Mobility services continues to grow.
    Fiber revenue growth: 16.8%AT&T Fiber customers added: 288,000AT&T Internet Air net adds: 270,000Total broadband net adds: >550,000Fiber customer base: >10 millionFiber convergence rate: 41.5% (up 180 bps YoY)
    		—4.1%—>15% EBITDA growth
    Business Wireline
    Revenues and EBITDA declined due to structural declines in legacy services. However, fiber and advanced connectivity service revenues showed accelerating growth, reflecting early traction from reinvested cost savings.
    Fiber and advanced connectivity service revenues growth: 6% (vs 3.5% in Q2)
    		—-7.8%—approx -13% EBITDA decline

    Operational metrics

    20
    Adjusted EPS
    $0.54consistent with prior year
    Q3 FY25

    Excludes gain on DIRECTV sale, legal settlement costs, and other items.

    Capital investment
    $5.3 billiondown $200 million year-over-year
    Q3 FY25

    Part of the full-year target of $22B-$22.5B.

    Pension plan contribution
    $400 million
    Q3 FY25

    Reported within cash from operations, impacting free cash flow. Part of a larger $1.5B plan by end of 2026.

    Mobility service revenue growth
    2.3%year-over-year
    Q3 FY25

    Reported growth rate was impacted by a one-time item in the prior year.

    Mobility EBITDA growth
    2.2%year-over-year
    Q3 FY25

    Reported growth rate was impacted by a one-time item in the prior year.

    Consumer Wireline total revenue growth
    4.1%year-over-year
    Q3 FY25

    Driven by fiber revenue growth.

    Consumer Wireline fiber revenue growth
    16.8%
    Q3 FY25

    Key driver for Consumer Wireline segment growth.

    Consumer Wireline EBITDA margin expansion
    350year-over-year
    Q3 FY25

    Driven by top-line growth and cost takeouts.

    Business Wireline fiber and advanced connectivity service revenues growth
    6%year-over-year
    Q3 FY25

    Reflects early traction from reinvesting cost savings.

    Cash and marketable securities
    >$20 billion
    Q3 FY25

    Includes proceeds from recent debt issuances, positioning for capital returns and pending acquisitions.

    DIRECTV investment sale proceeds
    $320 million
    Q3 FY25

    Received from the sale of remaining stake in DIRECTV. Excluded from reported free cash flow.

    Legal settlement impact on FCF
    $0.5 billion
    Q4 FY25

    Expected impact on free cash flow from out-of-pattern legal settlements. Expense accrued in Q3 and excluded from adjusted EPS.

    Depreciation and amortization expense
    $5 billionup slightly versus 2024 (full year)
    Q4 FY25

    Expected to be sequentially lower in Q4 as certain legacy assets become fully depreciated.

    Fiber locations passed
    31 million
    Q3 FY25

    Total locations passed with fiber.

    Internet Air availability
    47
    Q3 FY25

    Available in parts of 47 states.

    Fiber customer base growth (over 5 years)
    doubling
    past 5 years

    More than doubled fiber customer base in less than 5 years.

    Fiber revenue growth (over 5 years)
    tripling
    past 5 years

    Nearly tripled quarterly fiber revenues over the same period.

    Fiber household wireless convergence rate
    41%
    Q3 FY25

    Percentage of AT&T fiber households also choosing AT&T for wireless.

    Internet Air subscriber wireless convergence rate
    >50%
    Q3 FY25

    Percentage of Internet Air subscribers also choosing AT&T for wireless service.

    EchoStar spectrum deployment
    2/3
    by mid-November

    Deployment of 3.45 GHz spectrum under a short-term lease.

    Industry KPIs

    6
    MetricValueDetails
    Postpaid phone churn0.92%%
    Postpaid arpa vs ARPU$56.64USD
    Postpaid phone net adds405,000net adds
    Broadband fwa net adds split>550,000subscribers
    Share buyback capital returned$1.5 billionUSD
    Net debt EBITDA deleveraging path2.59x

    Product announcements

    1
    ProductTypeDetails
    AT&T Internet Airexpansion

    Deals & partnerships

    2
    EchoStarAcquisition of spectrum licenses

    Planned acquisition of spectrum licenses from EchoStar to enhance 5G wireless performance and accelerate Internet Air expansion. Deployment of 3.45 GHz spectrum is already underway under a short-term lease.

    LumenAcquisition of fiber assets

    Planned acquisition of fiber assets from Lumen, expected to close in early 2026. Most of the senior leadership team for the integration has been identified.

    Risks & headwinds

    4
    Elevated competitive activity and increased acquisition costs in MobilityQ3 FY25, expected to continue in Q4 FY25

    Postpaid phone churn up 14 bps YoY to 0.92%; total Mobility operating expenses up year-over-year primarily due to higher equipment costs and other acquisition-related expenses.

    Mitigation: Focus on high-value converged customer relationships, driving attractive returns through offers, and operational efficiencies in cost of service and customer support.

    ARPU pressure from targeting underpenetrated segments and converged offersQ3 FY25, expected to continue in Q4 FY25

    Postpaid phone ARPU $56.64, essentially consistent with prior year (normalized), impacted by attracting customers in underpenetrated segments with lower ARPUs and service discounts for converged customers.

    Mitigation: Strategy to maximize service revenue by expanding the customer base, driving more value through converged offers, and implementing pricing actions (e.g., effective December).

    Structural declines in legacy Business Wireline servicesOngoing

    Business Wireline revenues declined 7.8% YoY, EBITDA declined about 13% in Q3 FY25.

    Mitigation: Reinvesting cost savings into driving improved growth in fiber and fixed wireless, positioning the business for sustained growth in advanced connectivity services, and operating more efficiently.

    Seasonality impacting Q4 net addsQ4 FY25

    Fiber net adds expected to exhibit typical seasonality with lower new connections in Q4; postpaid phone churn and upgrades expected to follow seasonal patterns in Q4 due to new device launches and holidays.

    Mitigation: Anticipated and managed as part of typical business cycles; focus on converged offers to mitigate churn.

    What to watch in Q4 FY25

    5

    Lumen transaction close

    early 2026
    CurrentExpected in early part of 2026
    TargetTransaction closed

    Why it matters

    The closing of this acquisition is key to expanding AT&T's fiber footprint and is expected to boost organic growth and profitability.

    Most of the senior leadership team has been identified, and we now expect to close this transaction in the early part of 2026.

    Q&A highlights

    5

    How does AT&T manage the risk of other fiber builders overbuilding its target 60 million locations, and how will the phasing out of the DSL base impact broadband strategy?

    AT&T prides itself on being smart and agile in its fiber build, aiming to be first in markets and aggressively penetrate to deter competitors. They will recalibrate plans if overbuilds occur. The DSL base is being deliberately replaced with fixed wireless or fiber, leveraging converged offers to retain customers, especially with new spectrum.

    “We try to be very, very deliberate in how we allocate our capital in the markets that we're building in to make sure everybody knows where we're going and how aggressively we're going because we believe the right thing to do is to ensure that there is a good solid market structure for ourselves moving forward.”

    asked by Peter Supino · answered by John Stankey

    3 min read6 chapters

    Detailed Narrative

    01

    Broadband Strategy and Convergence Success

    AT&T reported its highest total broadband net adds in over 8 years, with more than 550,000 new subscribers to AT&T Fiber and Internet Air. Fiber customer base surpassed 10 million, more than doubling in less than 5 years, with quarterly fiber revenues nearly tripling over the same period. The company emphasizes a convergence strategy, noting that over 41% of AT&T Fiber households and more than half of Internet Air subscribers also use AT&T wireless services, leading to lower churn and higher lifetime values. This integrated approach is central to their goal of leading in retail connectivity service revenue by 2030.

    02

    Strategic Network Investments and Acquisitions

    The company is making significant progress on its planned acquisitions of spectrum licenses from EchoStar and fiber assets from Lumen. The EchoStar spectrum is already being deployed under a short-term lease, covering nearly two-thirds of the U.S. population by mid-November, which is expected to accelerate Internet Air growth. The Lumen transaction is now expected to close in early 2026. These acquisitions are anticipated to boost organic growth in revenues and profitability, strengthening AT&T's network and competitive advantage in delivering advanced connectivity.

    03

    Mobility Performance and Competitive Dynamics

    Mobility delivered 405,000 postpaid phone net adds, slightly above the prior year. Mobility service revenue grew 2.3% year-over-year, contributing to 2.2% EBITDA growth. However, postpaid phone churn increased to 0.92%, up 14 basis points, reflecting elevated marketplace activity. ARPU was consistent year-over-year when normalized, impacted by the strategy to attract customers in underpenetrated segments and through converged offers, which may have lower individual ARPUs but higher lifetime values. Management remains confident in its full-year Mobility outlook despite increased acquisition costs.

    04

    Wireline Business Transformation

    Consumer Wireline continued its strong performance with 4.1% revenue growth and over 15% EBITDA growth, driven by fiber expansion and cost efficiencies from legacy copper network reduction. Business Wireline revenues declined 7.8%, but fiber and advanced connectivity service revenues grew 6%, an acceleration from the previous quarter. The company is actively transitioning away from legacy infrastructure, aiming to position Business Wireline for sustained growth in advanced connectivity services and moderate EBITDA pressures.

    05

    Capital Allocation and Financial Strength

    AT&T returned $3.5 billion to shareholders in Q3, including $1.5 billion in stock repurchases, on track for a $4 billion full-year target. Net debt to adjusted EBITDA improved to 2.59x. The company ended the quarter with over $20 billion in cash, positioning it well to fund capital returns and pending acquisitions. Additional proceeds from the DIRECTV sale are expected, further bolstering liquidity. The company also made a $400 million pension contribution in Q3, with more planned, leveraging tax savings.

    06

    Long-term Vision and Operational Efficiency

    The company's long-term vision is to be the best advanced communications provider, leading in retail connectivity service revenue by 2030. This involves increasing fiber and convergence penetration, with a majority of incremental revenue growth from converged relationships. Ongoing network modernization, including wireless network completion by end of 2027, is expected to drive significant operational efficiencies in maintenance and power, contributing to overall margin expansion.

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