AT&T (T +0.42%), a U.S. telecommunications and connectivity provider, released its Q2 2025 earnings on July 23, 2025. The company posted adjusted earnings per share of $0.54, just above the average non-GAAP estimate of $0.53, and reported GAAP revenue of $30.8 billion, ahead of the $30.46 billion GAAP forecast. The quarter saw robust growth in its 5G and fiber segments, higher free cash flow, and the start of a share repurchase program. However, operating margins in key business lines came under pressure, and the Business Wireline segment continued to shrink, pressing on overall profitability.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $0.54 | $0.53 | $0.51 | 5.9 % |
| Revenue (GAAP) | $30.8 billion | $30.46 billion | $29.8 billion | 3.4% |
| Free Cash Flow (Non-GAAP) | $4.4 billion | $4.0 billion | 10.0 % | |
| Adjusted EBITDA (Non-GAAP) | $11.7 billion | $11.3 billion | 3.5 % | |
| Net Income (GAAP) | $4.9 billion | $3.9 billion | 25.6% |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
About AT&T: Business Overview and Success Factors
AT&T (T +0.42%) is a major U.S. telecom company providing wireless, broadband, and fiber-based internet services to consumers and businesses. Its network delivers mobile and fixed connectivity using both 5G wireless technology and extensive fiber infrastructure.
The company's strategy focuses on expanding advanced 5G and fiber networks to reach more customer locations. It is also transitioning customers off its legacy copper network, aiming for increased operational efficiency and cost reduction. Key success factors for AT&T include its ability to add high-value subscribers through bundled services, maintain network reliability, and respond to intense competition in the wireless and home internet markets. Regulatory developments and investment in research and development, such as in cybersecurity and data analytics, also play a critical role in the company’s ability to innovate and sustain growth.
Quarter Highlights and Segment Performance
The quarter was marked by continued growth in 5G and fiber subscribers. The company reported 401,000 postpaid phone net additions, lower than last year, but AT&T Internet Air customers increased. Total fiber customer locations passed rose to more than 30 million as of the end of Q2 2025, and the number of AT&T Internet Air customers surpassed 1 million for the first time in Q2 2025. This growth aligns with AT&T’s roadmap to reach up to 60 million fiber locations by 2030 through the planned acquisition of Lumen’s mass market fiber business and expanded partnerships.
The Mobility segment recorded $21.8 billion in operating revenue, up nearly 7% year-over-year. Service revenue reached $16.85 billion, an increase of 3.5% year-over-year, while Equipment revenue jumped 18.8% year-over-year due to higher wireless device sales volumes. However, margin pressure continued: segment EBITDA margin slipped to 43.4% (non-GAAP) for Mobility, a drop of 1.5 percentage points from the prior year, as normalized consumer contract roll-offs drove higher churn (0.87%, up from 0.70% last year).
The Consumer Wireline segment also delivered growth with $3.54 billion in operating revenue, up 5.8% year-over-year for Consumer Wireline revenues. Importantly, Fiber broadband revenue grew nearly 19% year-over-year, and the segment’s EBITDA margin improved by over 3 percentage points compared to Q2 2024. The company’s consumer broadband average revenue per user (ARPU) for fiber increased 6.2%, and broadband ARPU increased 7.5% year-over-year.
By contrast, the Business Wireline segment continued to contract. Operating revenue fell 9.3 % to $4.31 billion, and the segment posted an operating loss of $201 million compared to a profit a year ago. Legacy copper service declines outpaced growth in advanced connectivity. EBITDA (non-GAAP) for this segment dropped 11.3%, and EBITDA margin for the Business Wireline segment was 30.6%.
LatAm operations reported GAAP revenue of $1.05 billion, a decline partly driven by foreign exchange trends, but LatAm operations reported EBITDA growth of nearly 13% year-over-year. Company-wide, consolidated revenue (GAAP) rose 3.5%. Net income (GAAP) increased by more than 25% to $4.9 billion year-over-year, and Free cash flow improved by 10% year-over-year, enabling $1.0 billion in share repurchases. Net debt stood at $120.3 billion at quarter-end, reflecting ongoing efforts to balance investment and deleveraging. During the period, AT&T closed the sale of its remaining DIRECTV stake, further streamlining its business focus.
The company continues its transition away from aging copper networks. This process is aided by regulatory changes, especially friendlier policies from the Federal Communications Commission (FCC), allowing AT&T to accelerate the removal of copper in about 25% of its wire centers as of the end of Q1 2025. While this is expected to reduce costs in the long term, transformation costs in the short term have contributed to lower margins, especially in business services. Meanwhile, AT&T expects regulatory tax changes to generate between $6.5 billion and $8.0 billion in cash tax savings for 2025-2027, with $3.5 billion earmarked for further network expansion, as announced in Q2 2025 and $1.5 billion for pensions.
Outlook and What to Watch
For FY2025, management expects low single-digit growth in consolidated service revenue, mobility service revenue growth of at least 3% in 2025, and mid-to-high teens growth for consumer fiber broadband in fiscal 2025. Adjusted EBITDA is expected to grow at least 3% for the full year 2025, though Business Wireline EBITDA (non-GAAP) is forecast to see a low double-digit percentage decline in FY2025. The full-year adjusted EPS target is $1.97 to $2.07 in 2025, and free cash flow (non-GAAP) is expected to be in the low-to-mid $16 billion range in 2025. Capital investment in FY2025 is projected at $22.0 billion to $22.5 billion, and the company aims to repurchase $4 billion in shares in 2025.
Looking ahead, investors should monitor progress in fiber and 5G deployment, subscriber growth in converged products (customers using both wireless and fiber), and how well AT&T manages margins in Mobility and Business Wireline. The transition away from copper networks, the ability to leverage new tax savings for reinvestment, and the competitive response to elevated churn levels will remain key areas for future performance. Out-year targets call for a return to double-digit adjusted EPS growth in 2027, contingent on the successful execution of network expansion and cost initiatives.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
