AT&T Inc. (NYSE:T) announced financial results for its fiscal fourth-quarter of 2025 on Wednesday.
The telecom giant reported operating revenues of $33.47 billion, representing a 3.6% increase compared to the same period last year, which beat the analyst consensus estimate of $32.87 billion.
Adjusted earnings per share (EPS) stood at 52 cents, topping the analyst consensus estimate of 46 cents.
The sales growth was driven by higher revenue in the company’s mobility, consumer-wireline, and Mexico businesses, and partially offset by its business-wireline segment.
Business Wireline revenue fell 7.5% due to declines in legacy and transitional services.
In contrast, Mobility sales grew 5.3%. Consumer Wireline sales grew 2.9%.
AT&T reported 421,000 postpaid phone net additions, a decrease from 482,000 in the prior year.
AT&T’s postpaid phone churn, a measure of customer attrition, increased to 0.98% from 0.85% the previous year, while prepaid churn rose to 2.89% from 2.73%.
Despite this, the postpaid phone-only Average Revenue Per User (ARPU) declined by 0.3% year-over-year to $56.57.
The company said 42% of households who use AT&T fiber also opted for for their wireless service.
In its Consumer Wireline segment, AT&T continued to expand its fiber optic footprint, adding 283,000 AT&T Fiber net subscribers and 221,000 AT&T Internet Air net additions.
Financial Highlights
Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) increased to $11.2 billion from $10.8 billion in the year-ago quarter.
The company’s net income fell to $4.2 billion, down from $4.4 billion in the year-ago quarter.
Operating cash flow declined to $11.3 billion from $11.9 billion in the same quarter last year, resulting in free cash flow of $4.2 billion, down from $4.0 billion.
Capital expenditures for the quarter were $6.8 billion.
Looking at segment performance, the Mobility segment’s operating income grew 4.5% year-over-year to $6.4 billion, maintaining a margin of 26.3%, down from 26.5% a year ago.
The Consumer Wireline segment showed significant improvement, with its operating margin expanding to 15.1% from 8.0%.
Conversely, the Business Wireline segment reported an operating margin loss of 3.9%, narrowing from a 4.6% loss in the prior year.
Overall, the company’s operating income was $5.8 billion, compared to $5.3 billion in the same quarter last year.
Outlook
AT&T expects its heavy investments in 5G and fiber, along with planned acquisitions of Lumen’s mass-market fiber business and EchoStar spectrum, to drive stronger growth in adjusted EBITDA, adjusted EPS, and free cash flow through 2028.
For 2026–2028, the company forecasts low-single-digit annual service revenue growth.
The company projects adjusted EBITDA growth of 3% to 4% in 2026, then sees that improving to 5% or better by 2028 as gains in Advanced Connectivity more than offset declines in Legacy.
AT&T forecasts adjusted EPS of $2.25 to $2.35 in 2026 (versus an analyst consensus estimate of $2.21) and targets a double-digit three-year CAGR through 2028.
AT&T forecast annual profit above market expectations, betting that continued expansion of its wireless and fiber networks will position the U.S. carrier to capture rising demand for 5G services and high-speed broadband, Reuters reported.
Management expects the acquisitions to slightly pressure adjusted EPS in 2026 and 2027, then add to it starting in 2028.
AT&T also plans annual capital investment of $23 billion to $24 billion from 2026 through 2028.
It targets free cash flow of $18 billion or more in 2026, $19 billion or more in 2027, and $21 billion or more in 2028.
AT&T expects Advanced Connectivity service revenue to grow in the mid-single digits each year, including 5%+ growth in 2026 that includes about 100 basis points from the planned Lumen retail fiber subscriber acquisition.
The company also projects Advanced Connectivity EBITDA growth in the mid-to-high single digits annually, including 6%+ growth in 2026, and says the Lumen subscriber deal should not materially affect EBITDA in 2026.
Meanwhile, AT&T expects Legacy service revenue to fall more than 20% in 2026 as it continues shutting down its copper-based network across most of its footprint by the end of 2029 and moving customers to 5G and fiber.
The company expects Legacy revenue to become immaterial by the end of 2029 and anticipates negative EBITDA from the segment after 2027 until it eliminates most direct copper-network operating costs.
It expects to close its acquisition of Lumen’s mass-markets fiber business and wireless-spectrum licenses in early 2026.
The company agreed in August to buy the assets from EchoStar under a $23 billion deal.
AT&T plans to put the assets it acquires from Lumen in a subsidiary, and then sell partial ownership of the subsidiary to an equity partner.
AT&T said on its earnings conference call that the average deployment cost per fiber passing has been rising by about 2% annually, reflecting ongoing cost pressures in its fiber buildout. The company also noted that first-quarter results will include incremental spending as it prepares to integrate and scale the retail operations it has agreed to acquire from Lumen, signaling near-term cost impacts tied to the transaction.
Dividend And Buyback
On capital returns, AT&T expects to send back more than $45 billion to shareholders from 2026 to 2028 through dividends and buybacks.
The company plans to keep its current annualized dividend at $1.11 per share, finish repurchases under its existing $10 billion authorization by the end of 2026, and begin buybacks under another $10 billion authorization already approved by the board.
AT&T expects to repurchase about $8 billion of common stock in 2026 and continue buybacks at a steady pace through 2028, subject to additional board approval.
Price Action: AT&T shares were up 2.70% at $23.63 during premarket trading on Wednesday, according to Benzinga Pro data.
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