AT&T Delivers Strong Second-Quarter Results as Investment-Led Strategy Gains Momentum
Rhea-AI Summary
AT&T (NYSE:T) reported second-quarter 2026 revenue of $31.6 billion, up 2.3% year over year, with diluted EPS from continuing operations of $0.66 and adjusted EPS* of $0.65 versus $0.54 a year ago. Adjusted EBITDA* rose 5.2% to $12.3 billion, and free cash flow* increased to $4.7 billion.
AT&T added over 1 million Advanced Connectivity customers, including 646,000 internet net adds and 432,000 postpaid phone net adds, and reached 38.6 million fiber locations. Advanced Connectivity service revenue grew 5.1%, with operating income up 20.3%. The company reiterated all 2026–2028 financial guidance and plans to return $45 billion+ to shareholders, including about $10 billion of share repurchases in 2026.
Positive
- Consolidated revenue up 2.3% year over year to $31.6 billion
- Adjusted EPS* up to $0.65 from $0.54 year over year
- Adjusted EBITDA* up 5.2% to $12.3 billion in Q2 2026
- Free cash flow* increased to $4.7 billion from $4.4 billion
- Advanced Connectivity operating income up 20.3% to $7.3 billion
- Planned capital returns of $45 billion+ to shareholders during 2026–2028
Negative
- Legacy revenues declined 25.9% year over year to $1.6 billion
- Legacy EBITDA* fell 45.5% to $523 million and margin declined 1,160 bps
- Latin America operating income decreased 17.4% to $38 million year over year
News Explained
AT&T reports $2.2 billion of second-quarter repurchases; its leverage target remains tied to closing the EchoStar transaction.
The
AT&T’s approximately
The company also ties its expected return of net debt to adjusted EBITDA to its target range within approximately three years after closing the EchoStar transaction, so that timing depends on the transaction’s closing.
Market reaction after 2Q26 earnings report: T +3.50% in the Jul 22 session
In the Jul 22 session, T gained 3.50%, reflecting a moderate positive market reaction. Our momentum scanner triggered 4 alerts that day, indicating moderate trading interest and price volatility.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Historical Context
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| Jul 16 | Fanatics partnership activation | Positive | +2.6% | AT&T activated as Official Connectivity Provider at Fanatics Fest NYC. |
| Jul 15 | Connectivity ranking | Positive | +0.7% | AT&T reported the fastest converged customer experience based on Ookla data. |
| Jul 13 | Customer promotion | Positive | +2.0% | AT&T offered complimentary international calls during specified soccer match days. |
| Jul 10 | 5G technology demonstration | Positive | +0.4% | AT&T and Ericsson demonstrated real-time drone detection using 5G infrastructure. |
| Jul 09 | Customer satisfaction ranking | Positive | -0.4% | AT&T ranked first for small-business internet customer satisfaction in JD Power study. |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Recent positive AT&T news generally aligned with positive 24-hour reactions, with one positive-news divergence.
Key Terms
adjusted ebitda financial
free cash flow financial
postpaid phone churn financial
net debt-to-adjusted EBITDA ratio financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
AT&T adds more than 1 million Advanced Connectivity customers, driven by year-over-year increases in net adds across fiber, fixed wireless, and postpaid phone subscribers
The Company reiterates all consolidated full-year 2026 and multi-year financial guidance and multi-year capital return plans, with accelerated pace of share repurchases in 2026
"The accelerated growth we delivered this quarter shows our structural advantages to lead the next era of connectivity," said John Stankey, AT&T Chairman and CEO. "We are accelerating the pace of our planned share repurchases this year to approximately
Second-Quarter Consolidated Results1
- Revenues totaled
$31.6 billion 2.3% from the year-ago quarter - Diluted EPS from continuing operations was
$0.66 $0.62 $0.65 $0.54 - Operating income was
$7.0 billion $7.5 billion - Income from continuing operations was
$5.0 billion 3.6% year over year; adjusted EBITDA* was$12.3 billion 5.2% year over year - Cash from operating activities from continuing operations was
$10.8 billion $9.8 billion - Capital expenditures related to continuing operations were
$5.7 billion $6.1 billion - Free cash flow* was
$4.7 billion $4.4 billion
Second-Quarter Highlights
- Added over 1 million Advanced Connectivity customers, driven by year-over-year increases in net adds across fiber, fixed wireless, and postpaid phone subscribers
- Advanced Connectivity service revenue of
$23.5 billion 5.1% year over year - Advanced Connectivity operating income of
$7.3 billion 20.3% year over year with EBITDA* of$12.0 billion 8.0% 42.5% of households with AT&T's advanced home internet services also chose AT&T wireless2- 646,000 total consumer and business Advanced Connectivity internet net adds, including 367,000 fiber and 279,000 fixed wireless
- 432,000 postpaid phone net adds with postpaid phone churn of
0.86% - Added more than 1 million total consumer and business locations reached with fiber for a total of 38.6 million; the Company remains on track to reach over 40 million total fiber locations by the end of 2026 and more than 60 million by the end of 20303
- Returned
$4.1 billion $2.2
Outlook and Capital Allocation Plan
AT&T maintains its outlook for improved growth in adjusted EBITDA* and adjusted EPS* and higher free cash flow* through 2028, its plans to return
The Company's long-term outlook for 2026-2028 includes4:
- Service revenue growth in the low-single-digit range annually
- Advanced Connectivity service revenue growth in the mid-single-digit range annually, including expected growth of
5% + in 2026 - Legacy service revenue decline of
20% + in 2026 and be immaterial by the end of 2029
- Advanced Connectivity service revenue growth in the mid-single-digit range annually, including expected growth of
- Adjusted EBITDA* growth in the
3% to4% range in 2026, improving to5% or better in 2028- Advanced Connectivity EBITDA* growth in the mid-to-high-single-digit range annually, including expected growth of
6% + in 2026 - Legacy EBITDA* expected to turn negative after 2027, until AT&T has substantially eliminated direct costs associated with operating its copper-based network5
- Advanced Connectivity EBITDA* growth in the mid-to-high-single-digit range annually, including expected growth of
- Adjusted EPS* of
$2.25 $2.35 - Capital investment* in the
$23 billion $24 billion - Free cash flow* of
$18 $19 $21 - Strong capital returns, including plans to maintain its current annualized common stock dividend of
$1.11 $24 billion $10 billion
Note: AT&T's second-quarter 2026 earnings conference call will be webcast at 8:30 a.m. ET on Wednesday, July 22, 2026. The webcast and related materials, including financial highlights, will be available at investors.att.com.
Consolidated Financial Results
- Revenues for the second quarter totaled
$31.6 billion $30.8 billion 2.3% . This was largely due to growth in Advanced Connectivity fiber and wireless revenues, with fiber revenues including the impact of our first-quarter acquisition of Lumen's mass markets fiber business. Revenues inMexico were also higher due to favorable foreign exchange impacts. Offsetting these increases were lower Legacy revenues from lower demand for services as the Company continues to decommission its copper-based network. - Operating expenses were
$24.5 billion $24.3 billion - Operating income was
$7.0 billion $6.5 billion $7.5 billion $6.5 billion - Income from continuing operations was
$5.0 billion $4.9 billion - Income from continuing operations attributable to common stock was
$4.6 billion $4.5 billion $0.66 $0.62 $(0.01) $0.65 , versus$0.54 - Adjusted EBITDA* was
$12.3 billion $11.7 billion - Cash from operating activities from continuing operations was
$10.8 billion $9.8 billion $0.3 billion $100 million - Capital expenditures related to continuing operations were
$5.7 billion $4.9 billion $6.1 billion $5.1 billion $0.4 billion $0.2 billion - Free cash flow* was
$4.7 billion $4.4 billion - Total debt was
$144.0 billion $126.4 billion
Segment Results6
Advanced Connectivity service revenues grew
Advanced Connectivity | ||||||
Dollars in millions | Second Quarter | Percent | ||||
Unaudited | 2026 | 2025 | Change | |||
Operating Revenues | $ 28,615 | $ 27,497 | 4.1 | % | ||
Service | 23,478 | 22,334 | 5.1 | % | ||
Wireless Service | 17,413 | 16,853 | 3.3 | % | ||
Advanced Home Internet | 2,926 | 2,299 | 27.3 | % | ||
Business Fiber and Advanced Connectivity | 1,946 | 1,769 | 10.0 | % | ||
Business Transitional and Other | 1,042 | 1,249 | (16.6) | % | ||
Other Service | 151 | 164 | (7.9) | % | ||
Equipment | 5,137 | 5,163 | (0.5) | % | ||
Operating Expenses | 21,270 | 21,391 | (0.6) | % | ||
Operating Income | 7,345 | 6,106 | 20.3 | % | ||
Operating Income Margin | 25.7 | % | 22.2 | % | 350 | BP |
EBITDA* | $ 12,032 | $ 11,141 | 8.0 | % | ||
EBITDA Margin* | 42.0 | % | 40.5 | % | 150 | BP |
Advanced Connectivity segment revenues grew
Operating expenses were down
Operating income was
Legacy revenues continued to decline year over year in line with AT&T's goal to power down and stop providing service over the large majority of its domestic copper-based network by the end of 2029.
Legacy | ||||||
Dollars in millions | Second Quarter | Percent | ||||
Unaudited | 2026 | 2025 | Change | |||
Operating Revenues | $ 1,632 | $ 2,202 | (25.9) | % | ||
Operating Expenses | 1,109 | 1,243 | (10.8) | % | ||
Operating Income | 523 | 959 | (45.5) | % | ||
Operating Income Margin | 32.0 | % | 43.6 | % | (1,160) | BP |
EBITDA* | $ 523 | $ 959 | (45.5) | % | ||
EBITDA Margin* | 32.0 | % | 43.6 | % | (1,160) | BP |
Legacy segment revenues were down
Dollars in millions | Second Quarter | Percent | ||
Unaudited | 2026 | 2025 | Change | |
Operating Revenues | $ 1,224 | $ 1,054 | 16.1 | % |
Service | 780 | 662 | 17.8 | % |
Equipment | 444 | 392 | 13.3 | % |
Operating Expenses | 1,186 | 1,008 | 17.7 | % |
Operating Income | 38 | 46 | (17.4) | % |
EBITDA* | 227 | 201 | 12.9 | % |
* Further clarification and explanation of non-GAAP measures and reconciliations to the most comparable GAAP measures can be found in the "Non-GAAP Measures and Reconciliations to GAAP Measures" section of the release and at investors.att.com. |
1 With the closing of the acquisition of substantially all of Lumen's Mass Markets fiber business on February 2, 2026, the fiber customer relationships were retained by AT&T and are included in the Company's year-to-date results, unless otherwise indicated. The recently acquired fiber network assets, including certain fiber network build capabilities, were placed in a wholly owned subsidiary, of which AT&T plans to sell a controlling interest to an equity partner that will co-invest in the ongoing business. As such, the subsidiary is classified as held-for-sale and reflected as discontinued operations. |
2 Advanced home internet connections with AT&T wireless is defined as AT&T Fiber and AT&T Internet Air connections that are also primary wireless account holders that subscribe to consumer postpaid phone service. AT&T refers to these customers as converged customers. Convergence rate represents the ratio of converged customers to advanced home internet connections. This 2Q26 convergence metric is presented based on available information and is subject to revision. |
3 Total consumer and business locations reached with fiber represents the sum of: (1) AT&T Owned and Operated locations, which reflect its customer locations passed by AT&T's fiber network and (2) AT&T Fiber Ventures locations, which represent locations served from the recently acquired mass markets fiber business, Gigapower, and other commercial open access providers. |
4 The Company's long-term outlook for 2026-2028 is presented on a continuing operations basis and excludes discontinued operations. |
5 The strategy to remove legacy fixed costs across a geography is tied to the decommissioning of infrastructure after all customers have been upgraded to newer services. Gaining approvals could delay this decommissioning beyond 2029. |
6 Effective with the Company's first-quarter 2026 reporting, AT&T revised its operating segments to reflect the evolution of its business model to focus on delivering converged advanced connectivity services. |
About AT&T
We help more than 100 million U.S. families, friends and neighbors, plus nearly 2.5 million businesses, connect to greater possibility. From the first phone call 150 years ago to our 5G wireless and multi-gig internet offerings today, we @ATT innovate to improve lives. For more information about AT&T Inc. (NYSE:T), please visit us at about.att.com. Investors can learn more at investors.att.com.
Cautionary Language Concerning Forward-Looking Statements
Information set forth in this news release contains financial estimates and other forward-looking statements that are subject to risks and uncertainties, and actual results might differ materially. A discussion of factors that may affect future results is contained in AT&T's filings with the Securities and Exchange Commission. AT&T disclaims any obligation to update and revise statements contained in this news release based on new information or otherwise.
Non-GAAP Measures and Reconciliations to GAAP Measures
Schedules and reconciliations of non-GAAP financial measures cited in this document to the most comparable financial measures under generally accepted accounting principles (GAAP) can be found at investors.att.com and in our Form 8-K dated July 22, 2026. Adjusted diluted EPS, adjusted operating income, EBITDA, EBITDA margin, adjusted EBITDA, free cash flow, and net debt are non-GAAP financial measures frequently used by investors and credit rating agencies. The information below refers only to AT&T's continuing operations and does not include discussion of balances or activity related to discontinued operations.
Adjusted EPS is calculated by excluding from operating revenues, operating expenses, other income (expenses) and income tax expense, certain significant items that are non-operational or non-recurring in nature, including dispositions and merger integration and transaction costs, actuarial gains and losses, significant abandonments and impairments, benefit-related gains and losses, employee separation and other material gains and losses. Non-operational items arising from asset acquisitions and dispositions include the amortization of intangible assets. While the expense associated with the amortization of certain wireless licenses and customer lists is excluded, the revenue of the acquired companies is reflected in the measure and those assets contribute to revenue generation. We also adjust for net actuarial gains or losses associated with our pension and postemployment benefit plans due to the often-significant impact on our results (we immediately recognize this gain or loss in the income statement, pursuant to our accounting policy for the recognition of actuarial gains and losses). Consequently, our adjusted results reflect an expected return on plan assets rather than the actual return on plan assets, as included in the GAAP measure of income. The tax impact of adjusting items is calculated using the adjusted effective tax rate during the quarter except for adjustments that, given their magnitude, can drive a change in the effective tax rate; in these cases, we use the actual tax expense or combined marginal rate of approximately
For 2Q26, adjusted EPS of
The Company expects adjustments to 2026 reported diluted EPS from continuing operations to include acquisition-related amortization of approximately
Adjusted operating income is operating income adjusted for revenues and costs the Company considers non-operational in nature, including items arising from asset acquisitions or dispositions. For 2Q26, adjusted operating income of
EBITDA is income from continuing operations plus income tax, interest, and depreciation and amortization expenses minus equity in net income (loss) of affiliates and other income (expense) – net. Adjusted EBITDA is calculated by excluding from EBITDA certain significant items that are non-operational or non-recurring in nature, including dispositions and merger integration and transaction costs, significant abandonments and impairments, benefit-related gains and losses, employee separation, and other material gains and losses. Adjustments include transaction, legal, and other costs as discussed above.
For 2Q26, adjusted EBITDA of
At the segment level, EBITDA is operating income before depreciation and amortization. EBITDA margin is EBITDA divided by total revenues. For 2Q26, Advanced Connectivity EBITDA of
Adjusted EBITDA, Advanced Connectivity EBITDA, and Legacy EBITDA estimates depend on future levels of revenues and expenses which are not reasonably estimable at this time. Accordingly, we cannot provide reconciliations between these projected non-GAAP metrics and the most comparable GAAP metrics without unreasonable effort.
Free cash flow for 2Q26 of
Capital investment provides a comprehensive view of cash used to invest in our networks, product developments, and support systems. In connection with capital improvements, we have favorable payment terms of 120 days or more with certain vendors, referred to as vendor financing, which are excluded from capital expenditures and reported as financing activities. Capital investment includes capital expenditures and cash paid for vendor financing (
Net debt of
Discussion and Reconciliation of Non-GAAP Measures
We believe the following measures are relevant and useful information to investors as they are part of AT&T's internal management reporting and planning processes and are important metrics that management uses to evaluate the operating performance of AT&T and its segments. Management also uses these measures as a method of comparing performance with that of many of our competitors. These measures should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with U.S. generally accepted accounting principles (GAAP).
On February 2, 2026, we closed our transaction with Lumen Technologies, Inc. (Lumen) and acquired substantially all of Lumen's Mass Markets fiber business. The acquisition included customer relationships, which we include with our advanced home internet services, and fiber network assets that were placed in a wholly owned subsidiary, Forged Fiber 37 Services, LLC (Forged Fiber). We plan to sell a controlling interest in Forged Fiber to an equity partner that will co-invest in the ongoing business. As such, Forged Fiber met the criteria of held-for-sale and accordingly is reflected as discontinued operations in the accompanying financial statements. The information below refers only to our continuing operations and does not include discussion of balances or activity of Forged Fiber.
Free Cash Flow
Free cash flow is defined as cash from operations minus cash flows related to our DIRECTV equity investment that was sold in July 2025, minus capital expenditures and cash paid for vendor financing (classified as financing activities). Free cash flow after dividends is defined as cash from operations minus cash flows related to our DIRECTV equity investment, capital expenditures, cash paid for vendor financing and dividends on common and preferred shares. Free cash flow dividend payout ratio is defined as the percentage of dividends paid on common and preferred shares to free cash flow. We believe these metrics provide useful information to our investors because management views free cash flow as an important indicator of how much cash is generated by routine business operations, including capital expenditures and vendor financing, and makes decisions based on it. Management also views free cash flow as a measure of cash available to pay debt and return cash to shareowners.
Free Cash Flow and Free Cash Flow Dividend Payout Ratio | |||||
Dollars in millions | |||||
Second Quarter | Six-Month Period | ||||
2026 | 2025 | 2026 | 2025 | ||
Net Cash Provided by Operating Activities from Continuing Operations | $ 10,801 | $ 9,763 | $ 18,396 | $ 18,812 | |
Less: Distributions from DIRECTV classified as operating activities | — | (503) | — | (1,926) | |
Less: Cash taxes paid on DIRECTV | — | 251 | — | 251 | |
Less: Capital expenditures | (5,700) | (4,897) | (10,577) | (9,174) | |
Less: Payment of vendor financing | (431) | (220) | (643) | (423) | |
Free Cash Flow | 4,670 | 4,394 | 7,176 | 7,540 | |
Less: Dividends paid | (1,976) | (2,044) | (3,973) | (4,135) | |
Free Cash Flow after Dividends | $ 2,694 | $ 2,350 | $ 3,203 | $ 3,405 | |
Free Cash Flow Dividend Payout Ratio | 42.3 % | 46.5 % | 55.4 % | 54.8 % | |
Cash Paid for Capital Investment
In connection with capital improvements, we negotiate with some of our vendors to obtain favorable payment terms of 120 days or more, referred to as vendor financing, which are excluded from capital expenditures and reported in accordance with GAAP as financing activities. We present an additional view of cash paid for capital investment to provide investors with a comprehensive view of cash used to invest in our networks, product developments and support systems.
Cash Paid for Capital Investment | |||||
Dollars in millions | |||||
Second Quarter | Six-Month Period | ||||
2026 | 2025 | 2026 | 2025 | ||
Capital expenditures | $ (5,700) | $ (4,897) | $ (10,577) | $ (9,174) | |
Payment of vendor financing | (431) | (220) | (643) | (423) | |
Cash paid for Capital Investment | $ (6,131) | $ (5,117) | $ (11,220) | $ (9,597) | |
EBITDA
Our calculation of EBITDA, as presented, may differ from similarly titled measures reported by other companies. For AT&T, EBITDA excludes other income (expense) – net, and equity in net income (loss) of affiliates, as these do not reflect the operating results of our subscriber base or operations that are not under our control. Equity in net income (loss) of affiliates represents the proportionate share of the net income (loss) of affiliates in which we exercise significant influence, but do not control. Because we do not control these entities, management excludes these results when evaluating the performance of our primary operations. EBITDA also excludes interest expense and the provision for income taxes. Excluding these items eliminates the expenses associated with our capital and tax structures. Finally, EBITDA excludes depreciation and amortization in order to eliminate the impact of capital investments. EBITDA does not give effect to cash used for debt service requirements and thus does not reflect available funds for distributions, reinvestment or other discretionary uses. EBITDA is not presented as an alternative measure of operating results or cash flows from operations, as determined in accordance with GAAP.
These measures are used by management as a gauge of our success in acquiring, retaining and servicing subscribers because we believe these measures reflect AT&T's ability to generate and grow subscriber revenues while providing a high level of customer service in a cost-effective manner. Management also uses these measures as a method of comparing cash generation potential with that of many of its competitors. The financial and operating metrics which affect EBITDA include the key revenue and expense drivers for which management is responsible and upon which we evaluate performance.
There are material limitations to using these non-GAAP financial measures. EBITDA and EBITDA margin, as we have defined them, may not be comparable to similarly titled measures reported by other companies. Furthermore, these performance measures do not take into account certain significant items, including depreciation and amortization, interest expense, tax expense and equity in net income (loss) of affiliates. For market comparability, management analyzes performance measures that are similar in nature to EBITDA as we present it, and considering the economic effect of the excluded expense items independently as well as in connection with its analysis of net income as calculated in accordance with GAAP. EBITDA and EBITDA margin should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP.
EBITDA and Adjusted EBITDA | |||||
Dollars in millions | |||||
Second Quarter | Six-Month Period | ||||
2026 | 2025 | 2026 | 2025 | ||
Income from Continuing Operations | $ 5,038 | $ 4,861 | $ 9,257 | $ 9,553 | |
Additions: | |||||
Income Tax Expense | 784 | 1,237 | 1,963 | 2,536 | |
Interest Expense | 1,883 | 1,655 | 3,696 | 3,313 | |
Equity in Net (Income) Loss of Affiliates | 29 | (485) | 70 | (1,925) | |
Other (Income) Expense - Net | (696) | (767) | (1,290) | (1,222) | |
Depreciation and amortization | 4,966 | 5,251 | 9,932 | 10,441 | |
EBITDA | 12,004 | 11,752 | 23,628 | 22,696 | |
Transaction, legal and other costs | 149 | 49 | 295 | 128 | |
Benefit-related (gain) loss | (101) | (70) | (76) | (64) | |
Asset impairments and abandonments and restructuring | 286 | — | 286 | 504 | |
Adjusted EBITDA1 | $ 12,338 | $ 11,731 | $ 24,133 | $ 23,264 | |
1 See "Adjusting Items" section for additional discussion and reconciliation of adjusted items.
| |||||
Segment EBITDA and EBITDA Margin | |||||||||
Dollars in millions | |||||||||
Second Quarter | Six-Month Period | ||||||||
2026 | 2025 | 2026 | 2025 | ||||||
Advanced Connectivity Segment | |||||||||
Operating Income | $ 7,345 | $ 6,106 | $ 14,198 | $ 12,078 | |||||
Add: Depreciation and amortization | 4,687 | 5,035 | 9,392 | 10,008 | |||||
EBITDA | $ 12,032 | $ 11,141 | $ 23,590 | $ 22,086 | |||||
Total Operating Revenues | $ 28,615 | $ 27,497 | $ 57,086 | $ 54,689 | |||||
Operating Income Margin | 25.7 | % | 22.2 | % | 24.9 | % | 22.1 | % | |
EBITDA Margin | 42.0 | % | 40.5 | % | 41.3 | % | 40.4 | % | |
Legacy Segment | |||||||||
Operating Income | $ 523 | $ 959 | $ 1,135 | $ 1,978 | |||||
Add: Depreciation and amortization | — | — | — | — | |||||
EBITDA | $ 523 | $ 959 | $ 1,135 | $ 1,978 | |||||
Total Operating Revenues | $ 1,632 | $ 2,202 | $ 3,400 | $ 4,570 | |||||
Operating Income Margin | 32.0 | % | 43.6 | % | 33.4 | % | 43.3 | % | |
EBITDA Margin | 32.0 | % | 43.6 | % | 33.4 | % | 43.3 | % | |
Latin America Segment | |||||||||
Operating Income | $ 38 | $ 46 | $ 58 | $ 89 | |||||
Add: Depreciation and amortization | 189 | 155 | 389 | 305 | |||||
EBITDA | $ 227 | $ 201 | $ 447 | $ 394 | |||||
Total Operating Revenues | $ 1,224 | $ 1,054 | $ 2,397 | $ 2,025 | |||||
Operating Income Margin | 3.1 | % | 4.4 | % | 2.4 | % | 4.4 | % | |
EBITDA Margin | 18.5 | % | 19.1 | % | 18.6 | % | 19.5 | % | |
Adjusting Items
Adjusting items include revenues and costs we consider non-operational in nature, including items arising from asset acquisitions or dispositions, including the amortization of intangible assets. While the expense associated with the amortization of certain wireless licenses and customer lists is excluded, the revenue of the acquired companies is reflected in the measure and that those assets contribute to revenue generation. We also adjust for net actuarial gains or losses associated with our pension and postemployment benefit plans due to the often-significant impact on our results (we immediately recognize this gain or loss in the income statement, pursuant to our accounting policy for the recognition of actuarial gains and losses). Consequently, our adjusted results reflect an expected return on plan assets rather than the actual return on plan assets, as included in the GAAP measure of income.
The tax impact of adjusting items is calculated using the adjusted effective tax rate during the quarter except for adjustments that, given their magnitude, can drive a change in the effective tax rate, in these cases we use the actual tax expense or combined marginal rate of approximately
Adjusting Items | |||||
Dollars in millions | |||||
Second Quarter | Six-Month Period | ||||
2026 | 2025 | 2026 | 2025 | ||
Operating Expenses | |||||
Transaction, legal and other costs1 | $ 149 | $ 49 | $ 295 | $ 128 | |
Benefit-related (gain) loss | (101) | (70) | (76) | (64) | |
Asset impairments and abandonments and restructuring | 286 | — | 286 | 504 | |
Adjustments to Operations and Support Expenses | 334 | (21) | 505 | 568 | |
Amortization of intangible assets | 84 | 9 | 141 | 18 | |
Adjustments to Operating Expenses | 418 | (12) | 646 | 586 | |
Other | |||||
Equity in net income of DIRECTV | — | (503) | — | (1,926) | |
Benefit-related (gain) loss, impairments of investments and other | (89) | (189) | (61) | (125) | |
Adjustments to Income from Continuing Operations Before Income Taxes | 329 | (704) | 585 | (1,465) | |
Tax impact of adjustments | 81 | (168) | 140 | (333) | |
Tax-related items | 365 | — | 365 | — | |
Adjustments to Income From Continuing Operations | $ (117) | $ (536) | $ 80 | $ (1,132) | |
Preferred stock redemption gain | — | — | — | (90) | |
Adjustments to Income From Continuing Operations Attributable to Common Stock | $ (117) | $ (536) | $ 80 | $ (1,222) | |
1 Includes certain legal reserves and settlements that cover extended historical periods, novel theories of liability and/or are unpredictable in
| |||||
Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted EBITDA, Adjusted EBITDA margin and Adjusted diluted EPS are non-GAAP financial measures calculated by excluding from operating revenues, operating expenses, other income (expense) and income tax expense, certain significant items that are non-operational or non-recurring in nature, including dispositions and merger integration and transaction costs, actuarial gains and losses, significant abandonments and impairments, benefit-related gains and losses, employee separation and other material gains and losses. Management believes that these measures provide relevant and useful information to investors and other users of our financial data in evaluating the effectiveness of our operations and underlying business trends.
Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted EBITDA, Adjusted EBITDA margin and Adjusted diluted EPS should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP. AT&T's calculation of Adjusted items, as presented, may differ from similarly titled measures reported by other companies.
Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted EBITDA and Adjusted EBITDA Margin | |||||
Dollars in millions | |||||
Second Quarter | Six-Month Period | ||||
2026 | 2025 | 2026 | 2025 | ||
Operating Income | $ 7,038 | $ 6,501 | $ 13,696 | $ 12,255 | |
Adjustments to Operating Expenses | 418 | (12) | 646 | 586 | |
Adjusted Operating Income | $ 7,456 | $ 6,489 | $ 14,342 | $ 12,841 | |
EBITDA | $ 12,004 | $ 11,752 | $ 23,628 | $ 22,696 | |
Adjustments to Operations and Support Expenses | 334 | (21) | 505 | 568 | |
Adjusted EBITDA | $ 12,338 | $ 11,731 | $ 24,133 | $ 23,264 | |
Total Operating Revenues | $ 31,558 | $ 30,847 | $ 63,064 | $ 61,473 | |
Operating Income Margin | 22.3 % | 21.1 % | 21.7 % | 19.9 % | |
Adjusted Operating Income Margin | 23.6 % | 21.0 % | 22.7 % | 20.9 % | |
Adjusted EBITDA Margin | 39.1 % | 38.0 % | 38.3 % | 37.8 % | |
Adjusted Diluted EPS | |||||
Second Quarter | Six-Month Period | ||||
2026 | 2025 | 2026 | 2025 | ||
Diluted Earnings Per Share (EPS) From Continuing Operations | $ 0.66 | $ 0.62 | $ 1.21 | $ 1.22 | |
Equity in net income of DIRECTV | — | (0.05) | — | (0.21) | |
Restructuring and impairments | 0.03 | — | 0.03 | 0.05 | |
Benefit-related, transaction, legal and other items | 0.01 | (0.03) | 0.03 | (0.01) | |
Tax-related items | (0.05) | — | (0.05) | — | |
Adjusted EPS | $ 0.65 | $ 0.54 | $ 1.22 | $ 1.05 | |
Year-over-year growth - Adjusted | 20.4 % | 16.2 % | |||
Weighted Average Common Shares Outstanding with Dilution (000,000) | 6,946 | 7,219 | 6,987 | 7,221 | |
Net Debt to Adjusted EBITDA
Net Debt to EBITDA ratios are non-GAAP financial measures frequently used by investors and credit rating agencies and management believes these measures provide relevant and useful information to investors and other users of our financial data. Our Net Debt to Adjusted EBITDA ratio is calculated by dividing the Net Debt by the sum of the most recent four quarters Adjusted EBITDA. Net Debt is calculated by subtracting cash and cash equivalents and deposits at financial institutions that are greater than 90 days (e.g., certificates of deposit and time deposits), from the sum of debt maturing within one year and long-term debt.
Net Debt to Adjusted EBITDA - 2026 | |||||||||
Dollars in millions | |||||||||
Three Months Ended | |||||||||
Sept. 30, | Dec. 31, | March 31, | June 30, | Four Quarters | |||||
20251 | 20251 | 20261 | 2026 | ||||||
Adjusted EBITDA | $ 11,861 | $ 11,236 | $ 11,795 | $ 12,338 | $ 47,230 | ||||
End-of-period current debt | 9,323 | ||||||||
End-of-period long-term debt | 134,631 | ||||||||
Total End-of-Period Debt | 143,954 | ||||||||
Less: Cash and Cash Equivalents | 17,570 | ||||||||
Net Debt Balance | 126,384 | ||||||||
Annualized Net Debt to Adjusted EBITDA Ratio | 2.68 | ||||||||
1 As reported in AT&T's Form 8-K filed April 22, 2026.
| |||||||||
Net Debt to Adjusted EBITDA - 2025 | |||||||||
Dollars in millions | |||||||||
Three Months Ended | |||||||||
Sept. 30, | Dec. 31, | March 31, | June 30, | Four Quarters | |||||
20241 | 20241 | 20251 | 20251 | ||||||
Adjusted EBITDA | $ 11,586 | $ 10,791 | $ 11,533 | $ 11,731 | $ 45,641 | ||||
End-of-period current debt | 9,254 | ||||||||
End-of-period long-term debt | 123,057 | ||||||||
Total End-of-Period Debt | 132,311 | ||||||||
Less: Cash and Cash Equivalents | 10,499 | ||||||||
Less: Time Deposits | 1,500 | ||||||||
Net Debt Balance | 120,312 | ||||||||
Annualized Net Debt to Adjusted EBITDA Ratio | 2.64 | ||||||||
1 As reported in AT&T's Form 8-K filed April 22, 2026.
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