A month has gone by since the last earnings report for AT&T (T). Shares have added about 9.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is AT&T due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent drivers for AT&T Inc. before we dive into how investors and analysts have reacted as of late.
AT&T Beats Q4 Earnings Estimates on Solid Wireless & Fiber Demand
AT&T reported solid fourth-quarter 2025 results with healthy mobility and broadband demand trends. Both adjusted earnings and revenues surpassed the respective Zacks Consensus Estimate.
The company witnessed solid wireless traction and customer additions, which were partially offset by lower demand for legacy voice and data services. AT&T recorded strong subscriber growth backed by a resilient business model and robust cash flow position, driven by a diligent execution of operational plans. AT&T expects to continue investing in key areas of 5G and fiber and adjust its business according to the evolving market scenario to fuel long-term growth.
Net Income
On a GAAP basis, AT&T reported a net income of $3.75 billion or 53 cents per share compared with $4.03 billion or 56 cents per share in the year-ago quarter. Despite top-line growth, GAAP earnings declined year over year due to higher operating expenses. Excluding non-recurring items, adjusted earnings were 52 cents per share compared with 43 cents a year ago. Adjusted earnings for the fourth quarter missed the Zacks Consensus Estimate by 6 cents.
For 2025, AT&T reported a net income of $21.89 billion or $3.04 per share compared with $10.75 billion or $1.49 per share in 2024. Excluding non-recurring items, adjusted earnings for 2025 were $2.12 per share compared with $1.95 per share in 2024.
Quarter Details
Quarterly GAAP operating revenues increased 3.6% year over year to $33.47 billion, largely due to higher Mobility service and equipment sales, Consumer Wireline and Mexico revenues, partially offset by lower Business Wireline revenues. The top line beat the consensus mark of $32.73 billion. For 2025, AT&T recorded revenues of $125.6 billion compared with $122.3 billion in 2024.
Adjusted operating income increased to $6.12 billion from $5.43 billion for respective adjusted operating income margins of 18.3% and 16.8%. Adjusted EBITDA improved to $11.24 billion from $10.79 billion.
AT&T witnessed solid subscriber momentum with 641,000 post-paid net additions. This included 421,000 postpaid wireless phone additions. Postpaid churn was 1.12%, while postpaid phone-only average revenue per user (ARPU) decreased marginally year over year to $56.57 due to lower international roaming.
Segmental Performance
Communications: Total segment operating revenues were $32.12 billion, up from $31.14 billion, as improvements in the Mobility business (up 5.3% to $24.35 billion) and Consumer Wireline (up 2.9% to $3.56 billion) were partially offset by a decline in Business Wireline (down 7.5% to $4.2 billion).
Service revenues from the Mobility unit improved 2.4% to $16.95 billion, driven by solid subscriber gains, while equipment revenues were up 12.7% year over year to $7.4 billion due to higher volumes of non-phone sales and higher-priced phone sales. Revenues from the Consumer Wireline business were up due to a gain in fiber broadband. AT&T recorded net fiber additions of 283,000, while Internet Air added 221,000 subscribers during the quarter. By the end of 2030, AT&T expects to reach approximately 50 million customer locations with its in-region fiber network and more than 60 million fiber locations when including the Lumen Mass Markets fiber assets.
Revenues from Business Wireline were down due to lower demand for legacy voice and data services as customers shifted to more advanced IP-based offerings. Total segment operating income increased 9.5% to $6.8 billion, with operating margins of 21.1% (up 120 bps). Adjusted EBITDA was $11.65 billion compared with $11.3 billion in the year-ago quarter.
Latin America: Total operating revenues were $1.26 billion, up 20.6% year over year, due to higher equipment sales and service revenues. Adjusted EBITDA improved to $223 million from $171 million in the year-ago quarter.
Cash Flow & Liquidity
For 2025, AT&T generated $40.3 billion of cash from operations compared with $38.8 billion a year ago. Free cash flow for the quarter was $4.18 billion compared with $4.01 billion in the year-ago quarter. As of Dec. 31, 2025, AT&T had $18.23 billion of cash and cash equivalents with long-term debt of $127.09 billion compared with respective tallies of $3.3 billion and $118.44 billion a year ago. The company repurchased $4.3 billion worth of shares in 2025. Net debt to adjusted EBITDA was about 2.53X.
Guidance
While optimizing operations, AT&T is aiming to increase efficiencies to lower operating costs while focusing on 5G and fiber-based connectivity, along with an expanded reach of software-based entertainment platforms. For 2026, AT&T expects wireless service revenues to improve in low single digits, while broadband revenues are anticipated to grow in the mid to high-teens.
Adjusted earnings are projected to be between $2.25 and $2.35 per share. Free cash flow in 2026 is expected to be more than $18 billion due to cost savings. AT&T expects to repurchase $8 billion worth of shares in 2026 and return more than $45 billion to shareholders in 2026-2028 through share repurchases and dividends. The company is also aiming to reduce its debt burden by monetizing non-core assets.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in fresh estimates.
VGM Scores
At this time, AT&T has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. However, the stock has a score of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, AT&T has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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AT&T Inc. (T): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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