AT&T Posts 3.5% Revenue Gain in Q2

AT&T (T 0.43%), a major U.S. telecommunications company known for wireless and fiber broadband services, released its second-quarter 2025 results on July 23, 2025. The company reported revenue of $30.8 billion, surpassing Wall Street's expectation of $30.5 billion. Adjusted earnings per share (EPS) came in at $0.54, beating the analyst consensus of $0.53. The company also posted $4.4 billion in free cash flow, up from $4.0 billion a year earlier. Notably, its mobility and fiber segments delivered continued growth, helping offset softer business wireline results. Management described the quarter as solid, with execution on key strategic priorities and resumed share buybacks.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

About AT&T and What Drives Its Business

AT&T (T 0.43%) is a leading provider of wireless, broadband, and business connectivity in the United States and Latin America. It serves over 300 million people through its wireless network and passes millions of homes with its expanding fiber network. Its largest segments are Mobility, which includes wireless phone and data plans, and Consumer Wireline, mainly focused on fiber internet and broadband.

The company’s strategy centers on expanding its network through 5G and fiber build-outs, decommissioning legacy copper infrastructure, and investing in new technology. Success for AT&T depends heavily on acquiring and keeping customers on its mobile and broadband networks, strong cash flow, and disciplined capital investment. Managing competition, navigating U.S. regulations, and ongoing research and development are also crucial to its business model.

Quarter Highlights: Segment Trends and Metrics

Mobility, the wireless business, delivered $21.85 billion in operating revenue for the quarter, up 6.7 % from a year ago. Service revenue in this segment grew 3.5 %, driven by higher average revenue per user (ARPU) -- now at $57.04 -- and continued postpaid phone customer growth even as net additions softened to 401,000 compared to 419,000 a year earlier. Equipment revenue rose 18.8 % thanks to higher device sales. However, postpaid phone churn, which measures the rate at which customers leave, climbed to 0.87 % from 0.70 %. Management pointed out that this higher churn stems from more competitive offers across the industry and expected contract roll-offs.

Consumer Wireline, led by fiber internet and broadband, had revenues of $3.54 billion, up 5.8 %. The broadband business, and particularly fiber, continues to be a bright spot, with fiber revenue growing 18.9 % year over year to $2.1 billion. Broadband average revenue per user increased 7.5 % to $71.16, while fiber-specific ARPU rose 6.2 % to $73.26. Net additions for fiber reached 243,000, steady compared to last year, and total broadband net adds jumped to 150,000. Fixed wireless broadband, marketed as Internet Air, added 203,000 new users. Operating income for consumer wireline climbed to $335 million, up from $184 million, with EBITDA (earnings before interest, tax, depreciation, and amortization) improving 17.8 %.

The Business Wireline segment, which focuses on business network and connectivity services, continued to decline, with revenues falling 9.3 % to $4.31 billion. The segment posted an operating loss of $201 million versus $102 million operating income a year ago. EBITDA declined 11.3 % to $1.32 billion, and margins also slipped. The company attributed these declines to ongoing reductions in legacy product sales, only partially offset by growth in fiber and advanced services. Management said pressure will likely persist as older copper-based services are retired and cost reductions work to catch up with revenue declines.

Latin America operations generated $1.05 billion in revenue, which decreased 4.4 %, mainly due to foreign currency fluctuations. Nonetheless, EBITDA for this region increased nearly 13 % to $201 million. Wireless net adds grew by 235,000, further expanding the company’s regional footprint. The quarter also saw the completion of the DIRECTV stake sale, freeing capital for network investments and additional shareholder returns.

The company declared a quarterly dividend of $0.28 per share, unchanged from previous payouts.

Focus Areas and Business Strategy

AT&T’s business is built around providing core connectivity through wireless (Mobility) and broadband (Consumer Wireline) networks. Key to its future is the continued expansion of 5G -- which is fifth-generation wireless technology allowing faster and more reliable mobile data -- and fiber internet infrastructure. The company’s fiber services offer higher speeds and reliability compared to legacy copper-based networks.

One recent focus has been the decommissioning of copper networks in favor of fiber and 5G, which helps lower long-term operating costs and improves efficiency. Regulatory policy changes have also removed obstacles, allowing faster copper network shutdowns. Competitive intensity in both wireless and broadband remains high, with industry-wide promotions impacting churn and net subscriber additions. To respond, AT&T has emphasized bundled offers that combine wireless and fiber, which help increase customer value and reduce churn risk.

In addition to core services, AT&T continues to invest in research and development. Previous R&D spending near $955 million underscores the company’s focus on advancing new services and maintaining technological leadership, especially in areas such as cybersecurity and network reliability.

Strengthening its balance sheet remains important, as shown by ongoing debt reduction, strong free cash flow, and resumption of share repurchases. Net debt at the end of the period was $120.3 billion. Capital investment was $5.1 billion for the quarter, funding network upgrades and fiber buildout. The sale of its remaining DIRECTV stake further simplified the business and improved financial flexibility.

Looking Ahead: Guidance and Investor Watch Points

AT&T offered guidance for fiscal 2025, projecting consolidated service revenue growth in the low-single-digit percentage range. Mobility service revenue is expected to grow at least 3 %, while consumer fiber broadband should rise in the mid-to-high teens percent. Adjusted EBITDA is forecast to grow 3 % or more. The company set free cash flow guidance at low-to-mid $16 billion, with adjusted EPS expected between $1.97 and $2.07 for the year. For fiscal 2026 and 2027, management outlined longer-term targets including continued growth in service revenue, adjusted EBITDA, and double-digit percentage EPS improvements. Annual capital investment is expected to be around $23–24 billion in those years, with a goal for free cash flow of at least $18 billion in 2026 and $19 billion in 2027.

Investors are encouraged to monitor trends in wireless churn and net additions, as well as execution on the pace of fiber network build-outs. Persistent revenue and profitability declines in business wireline remain a risk area. Management also highlighted the impact of regulatory changes, including recent tax law revisions that free up additional cash for investment and shareholder returns. Ongoing share buybacks, strong free cash flow, and the move to accelerate fiber build-out all point to a company focused on both operational improvement and returning capital to shareholders.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.