AT&T Reports Strong Second-Quarter Financial Performance
Rhea-AI Summary
AT&T (NYSE:T) reported strong Q2 2025 results with revenues of $30.8 billion, up 3.5% year-over-year, and diluted EPS of $0.62, up from $0.49. The company delivered 401,000 postpaid phone net adds and 243,000 AT&T Fiber net adds.
Key financial metrics include operating income of $6.5 billion, net income of $4.9 billion, and free cash flow of $4.4 billion. Mobility service revenues grew 3.5% to $16.9 billion, while consumer fiber broadband revenues increased 18.9% to $2.1 billion.
AT&T expects $6.5-8.0 billion in tax savings during 2025-2027 from the One Big Beautiful Bill Act, with $3.5 billion planned for network investment to accelerate fiber build-out to 4 million locations annually by end of 2026. The company updated its 2025 guidance, projecting free cash flow in the low-to-mid $16 billion range and adjusted EPS of $1.97-2.07.
Positive
- Strong Q2 revenue growth of 3.5% to $30.8 billion
- Significant subscriber growth with 401,000 postpaid phone net adds
- Consumer fiber broadband revenue up 18.9% year-over-year
- Free cash flow increased to $4.4 billion from $4.0 billion year-ago
- Expected $6.5-8.0 billion tax savings during 2025-2027
- $3.5 billion planned investment to accelerate fiber network expansion
- Share repurchase program of $4 billion for 2025
Negative
- Business Wireline revenue declined 9.3% year-over-year
- Business Wireline operating income turned negative to -$201 million
- Operating income margin decreased 70 basis points in Communications segment
- Total debt remains high at $132.3 billion
- Latin America segment revenues declined 4.4% year-over-year
Insights
AT&T delivered strong Q2 results with subscriber growth, increased revenues, and improved financial outlook from tax savings.
AT&T has reported a robust second quarter with consolidated revenues of
The financial performance shows marked improvement with diluted EPS reaching
Particularly noteworthy is AT&T's fiber business momentum, with consumer fiber broadband revenues increasing by an impressive
The company's announcement of
AT&T has raised guidance for 2025, now expecting free cash flow in the low-to-mid $16 billion range and adjusted EPS of
AT&T's Q2 shows accelerating growth metrics, improved capital allocation, and tax windfall boosting long-term financial trajectory.
AT&T's Q2 results demonstrate a company effectively executing its connectivity-focused strategy with several key financial metrics showing improvement. The company reported operating income of
Cash generation has notably strengthened, with cash from operations reaching
The segment breakdown reveals divergent performance patterns. The Consumer Wireline segment stands out with EBITDA growth of
The most significant financial development is the
The updated guidance reflects confidence in AT&T's operational trajectory, with free cash flow projected to grow from the low-to-mid
From a balance sheet perspective, AT&T's total debt of
Company delivers robust, high-quality 5G and fiber subscriber growth as more customers choose converged connectivity services
"We are winning in a highly competitive marketplace, with the nation's largest wireless and fiber networks. Customers are increasingly choosing AT&T because we have the best technology and options for wireless and broadband connectivity, backed by the AT&T Guarantee," said John Stankey, AT&T Chairman and CEO. "The milestones achieved this quarter – from passing more than 30 million customer locations with fiber and eclipsing 1 million total AT&T Internet Air customers, to our agreement to acquire substantially all of Lumen's Mass Markets fiber business - strengthen the industry's best and leading connectivity portfolio."
Second-Quarter Consolidated Results
- Revenues of
$30.8 billion - Diluted EPS of
$0.62 $0.49 $0.54 $0.51 - Operating income of
$6.5 billion $6.5 billion - Net income of
$4.9 billion $11.7 billion - Cash from operating activities of
$9.8 billion $9.1 billion - Capital expenditures of
$4.9 billion $5.1 billion - Free cash flow* of
$4.4 billion $4.0 billion
Second-Quarter Highlights
- 401,000 postpaid phone net adds with postpaid phone churn of
0.87% - Mobility service revenues of
$16.9 billion 3.5% year over year - 243,000 AT&T Fiber net adds and 203,000 AT&T Internet Air net adds
- Consumer fiber broadband revenues of
$2.1 billion 18.9% year over year - Repurchased approximately
$1.0 billion - Closed the sale of entire remaining
70% stake in DIRECTV to TPG on July 2
Impact of Tax Provisions in the One Big Beautiful Bill Act
AT&T expects to realize
The Company intends to invest
AT&T also intends to contribute
Outlook
AT&T is updating certain elements of its financial guidance for 2025-2027 to reflect the impact of expected cash tax savings, as well as its year-to-date operating performance and outlook for the remainder of 2025. For the full year 2025, AT&T expects:
- Consolidated service revenue growth in the low-single-digit range.
- Mobility service revenue growth of
3% or better. - Consumer fiber broadband revenue growth in the mid-to-high teens.
- Mobility service revenue growth of
- Adjusted EBITDA* growth of
3% or better.- Mobility EBITDA* growth of approximately
3% . - Business Wireline EBITDA* to decline in the low-double-digit range.
- Consumer Wireline EBITDA* growth in the low-to-mid-teens range.
- Mobility EBITDA* growth of approximately
- Capital investment* in the
$22 $22.5 billion - Free cash flow* in the low-to-mid
$16 billion - Adjusted EPS* of
$1.97 $2.07 - Share repurchases of
$4 billion $1.3 billion
AT&T continues to operate the business to achieve the strategy outlined at its 2024 Analyst & Investor Day. Accordingly, AT&T reiterates its long-term financial outlook for:
- Consolidated service revenue growth in the low-single-digit range annually from 2026-2027.
- Adjusted EBITDA* growth of
3% or better annually from 2026-2027. - Adjusted EPS* accelerating to double-digit percentage growth in 2027.
As a result of the cash tax savings from provisions in the One Big Beautiful Bill Act, AT&T updates its financial outlook for:
- Capital investment* in the
$23 $24 billion - Free cash flow* of
$18 $19
Note: AT&T's second-quarter earnings conference call will be webcast at 8:30 a.m. ET on Wednesday, July 23, 2025. The webcast and related materials, including financial highlights, will be available at investors.att.com.
Consolidated Financial Results
- Revenues for the second quarter totaled
$30.8 billion $29.8 billion 3.5% . This was due to higher Mobility and Consumer Wireline revenues, partially offset by declines in Business Wireline andMexico , which included unfavorable foreign exchange impacts. - Operating expenses were
$24.3 billion $24.0 billion - Operating income was
$6.5 billion $5.8 billion $6.5 billion $6.3 billion - Equity in net income of affiliates was
$0.5 billion $0.3 billion - Net income was
$4.9 billion $3.9 billion - Net income attributable to common stock was
$4.5 billion $3.5 billion $0.62 $0.49 $(0.08) $0.54 $0.51 - Adjusted EBITDA* was
$11.7 billion $11.3 billion - Cash from operating activities was
$9.8 billion $9.1 billion - Capital expenditures were
$4.9 billion $4.4 billion $5.1 billion $4.9 billion $0.2 billion $0.6 billion - Free cash flow,* which excludes cash flows from DIRECTV, was
$4.4 billion $4.0 billion - Total debt was
$132.3 billion $120.3 billion
Segment and Business Unit Results
Communications segment revenues were
Communications Segment | |||
Dollars in millions | Second Quarter | Percent | |
Unaudited | 2025 | 2024 | Change |
Operating Revenues | $ 29,699 | $ 28,582 | 3.9 % |
Operating Income | 7,065 | 7,005 | 0.9 % |
Operating Income Margin | 23.8 % | 24.5 % | (70) BP |
Mobility service revenue grew
Mobility | |||
Dollars in millions; Subscribers in thousands | Second Quarter | Percent | |
Unaudited | 2025 | 2024 | Change |
Operating Revenues | $ 21,845 | $ 20,480 | 6.7 % |
Service | 16,853 | 16,277 | 3.5 % |
Equipment | 4,992 | 4,203 | 18.8 % |
Operating Expenses | 14,914 | 13,761 | 8.4 % |
Operating Income | 6,931 | 6,719 | 3.2 % |
Operating Income Margin | 31.7 % | 32.8 % | (110) BP |
EBITDA* | $ 9,487 | $ 9,195 | 3.2 % |
43.4 % | 44.9 % | (150) BP | |
EBITDA Service Margin* | 56.3 % | 56.5 % | (20) BP |
Total Wireless Net Adds3 | 289 | 997 | |
Postpaid | 479 | 593 | |
Postpaid Phone | 401 | 419 | |
Postpaid Other | 78 | 174 | |
Prepaid Phone | (34) | 35 | |
Postpaid Churn | 1.02 % | 0.85 % | 17 BP |
Postpaid Phone-Only Churn | 0.87 % | 0.70 % | 17 BP |
Prepaid Churn | 2.64 % | 2.57 % | 7 BP |
Postpaid Phone ARPU | $ 57.04 | $ 56.42 | 1.1 % |
Mobility revenues were up
Business Wireline revenues declined year over year driven by continued secular pressures on legacy and other transitional services that were partially offset by growth in fiber and advanced connectivity services.
Business Wireline | |||
Dollars in millions | Second Quarter | Percent | |
Unaudited | 2025 | 2024 | Change |
Operating Revenues | $ 4,313 | $ 4,755 | (9.3) % |
Operating Expenses | 4,514 | 4,653 | (3.0) % |
Operating Income/(Loss) | (201) | 102 | — % |
Operating Income Margin | (4.7) % | 2.1 % | (680) BP |
EBITDA* | $ 1,320 | $ 1,488 | (11.3) % |
EBITDA Margin* | 30.6 % | 31.3 % | (70) BP |
Business Wireline revenues were down
Consumer Wireline achieved strong broadband revenue growth driven by an
Consumer Wireline | |||
Dollars in millions; Subscribers in thousands | Second Quarter | Percent | |
Unaudited | 2025 | 2024 | Change |
Operating Revenues | $ 3,541 | $ 3,347 | 5.8 % |
Operating Expenses | 3,206 | 3,163 | 1.4 % |
Operating Income | 335 | 184 | 82.1 % |
Operating Income Margin | 9.5 % | 5.5 % | 400 BP |
EBITDA* | $ 1,293 | $ 1,098 | 17.8 % |
EBITDA Margin* | 36.5 % | 32.8 % | 370 BP |
Broadband Net Adds | 150 | 52 | |
Fiber | 243 | 239 | |
Non Fiber | (93) | (187) | |
AT&T Internet Air | 203 | 139 | |
Broadband ARPU | $ 71.16 | $ 66.17 | 7.5 % |
Fiber ARPU | $ 73.26 | $ 69.00 | 6.2 % |
Consumer Wireline revenues were up
Latin America Segment | |||
Dollars in millions; Subscribers in thousands | Second Quarter | Percent | |
Unaudited | 2025 | 2024 | Change |
Operating Revenues | $ 1,054 | $ 1,103 | (4.4) % |
Service | 662 | 699 | (5.3) % |
Equipment | 392 | 404 | (3.0) % |
Operating Expenses | 1,008 | 1,097 | (8.1) % |
Operating Income | 46 | 6 | — % |
EBITDA* | $ 201 | $ 178 | 12.9 % |
Total Wireless Net Adds | 235 | 177 | |
Postpaid | 183 | 142 | |
Prepaid | 64 | 67 | |
Reseller | (12) | (32) | |
1Locations reached with fiber include consumer and business locations: (i) passed with fiber, and (ii) served with fiber through commercial open-access providers. |
About AT&T
We help more than 100 million
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 23, 2025. Adjusted diluted EPS, adjusted operating income, EBITDA, adjusted EBITDA, free cash flow, and net debt are non-GAAP financial measures frequently used by investors and credit rating agencies. Prior periods for free cash flow and adjusted diluted EPS have been recast to conform to the current period presentation to remove cash flows and equity in net income from our investment in DIRECTV.
Adjusted diluted 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 2Q25, adjusted EPS of
Adjusted operating income is operating income adjusted for revenues and costs we consider non-operational in nature, including items arising from asset acquisitions or dispositions. For 2Q25, adjusted operating income of
EBITDA is net income plus income tax, interest, and depreciation and amortization expenses minus equity in net income 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.
For 2Q25, adjusted EBITDA of
At the segment or business unit level, EBITDA is operating income before depreciation and amortization. EBITDA margin is EBITDA divided by total revenues. EBITDA service margin is EBITDA divided by total service revenues.
Adjusted EBITDA estimates for 2025-2027, and Mobility EBITDA, Business Wireline EBITDA and Consumer Wireline EBITDA estimates for 2025 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 2Q25 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
Free Cash Flow
Free cash flow is defined as cash from operations minus cash flows related to our DIRECTV equity investment (cash distributions minus cash taxes from DIRECTV), 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 | ||||
2025 | 2024 | 2025 | 2024 | ||
Net Cash Provided by Operating Activities | $ 9,763 | $ 9,093 | $ 18,812 | $ 16,640 | |
Less: Distributions from DIRECTV classified as operating activities | (503) | (350) | (1,926) | (674) | |
Less: Cash taxes paid on DIRECTV | 251 | 121 | 251 | 270 | |
Less: Capital expenditures | (4,897) | (4,360) | (9,174) | (8,118) | |
Less: Payment of vendor financing | (220) | (550) | (423) | (1,391) | |
Free Cash Flow | 4,394 | 3,954 | 7,540 | 6,727 | |
Less: Dividends paid | (2,044) | (2,099) | (4,135) | (4,133) | |
Free Cash Flow after Dividends | $ 2,350 | $ 1,855 | $ 3,405 | $ 2,594 | |
Free Cash Flow Dividend Payout Ratio | 46.5 % | 53.1 % | 54.8 % | 61.4 % | |
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 | ||||
2025 | 2024 | 2025 | 2024 | ||
Capital expenditures | $ (4,897) | $ (4,360) | $ (9,174) | $ (8,118) | |
Payment of vendor financing | (220) | (550) | (423) | (1,391) | |
Cash paid for Capital Investment | $ (5,117) | $ (4,910) | $ (9,597) | $ (9,509) | |
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.
EBITDA service margin is calculated as EBITDA divided by service revenues.
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.
We believe EBITDA Service Margin (EBITDA as a percentage of service revenues) to be a more relevant measure than EBITDA Margin (EBITDA as a percentage of total revenue) for our Mobility business unit operating margin. We also use wireless service revenues to calculate margin to facilitate comparison, both internally and externally with our wireless competitors, as they calculate their margins using wireless service revenues as well.
There are material limitations to using these non-GAAP financial measures. EBITDA, EBITDA margin and EBITDA service 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, EBITDA margin and EBITDA service 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 | ||||
2025 | 2024 | 2025 | 2024 | ||
Net Income | $ 4,861 | $ 3,949 | $ 9,553 | $ 7,700 | |
Additions: | |||||
Income Tax Expense | 1,237 | 1,142 | 2,536 | 2,260 | |
Interest Expense | 1,655 | 1,699 | 3,313 | 3,423 | |
Equity in Net (Income) of Affiliates | (485) | (348) | (1,925) | (643) | |
Other (Income) Expense - Net | (767) | (682) | (1,222) | (1,133) | |
Depreciation and amortization | 5,251 | 5,072 | 10,441 | 10,119 | |
EBITDA | 11,752 | 10,832 | 22,696 | 21,726 | |
Transaction, legal and other costs | 49 | 35 | 128 | 67 | |
Benefit-related (gain) loss | (70) | (10) | (64) | (49) | |
Asset impairments and abandonments and restructuring | — | 480 | 504 | 639 | |
Adjusted EBITDA1 | $ 11,731 | $ 11,337 | $ 23,264 | $ 22,383 | |
1 See "Adjusting Items" section for additional discussion and reconciliation of adjusted items. | |||||
Segment and Business Unit EBITDA, EBITDA Margin and EBITDA Service Margin | |||||
Dollars in millions | |||||
Second Quarter | Six-Month Period | ||||
2025 | 2024 | 2025 | 2024 | ||
Communications Segment | |||||
Operating Income | $ 7,065 | $ 7,005 | $ 14,056 | $ 13,750 | |
Add: Depreciation and amortization | 5,035 | 4,776 | 10,008 | 9,506 | |
EBITDA | $ 12,100 | $ 11,781 | $ 24,064 | $ 23,256 | |
Total Operating Revenues | $ 29,699 | $ 28,582 | $ 59,259 | $ 57,439 | |
Operating Income Margin | 23.8 % | 24.5 % | 23.7 % | 23.9 % | |
EBITDA Margin | 40.7 % | 41.2 % | 40.6 % | 40.5 % | |
Mobility | |||||
Operating Income | $ 6,931 | $ 6,719 | $ 13,671 | $ 13,187 | |
Add: Depreciation and amortization | 2,556 | 2,476 | 5,082 | 4,963 | |
EBITDA | $ 9,487 | $ 9,195 | $ 18,753 | $ 18,150 | |
Total Operating Revenues | $ 21,845 | $ 20,480 | $ 43,415 | $ 41,074 | |
Service Revenues | 16,853 | 16,277 | 33,504 | 32,271 | |
Operating Income Margin | 31.7 % | 32.8 % | 31.5 % | 32.1 % | |
EBITDA Margin | 43.4 % | 44.9 % | 43.2 % | 44.2 % | |
EBITDA Service Margin | 56.3 % | 56.5 % | 56.0 % | 56.2 % | |
Business Wireline | |||||
Operating Income (Loss) | $ (201) | $ 102 | $ (299) | $ 166 | |
Add: Depreciation and amortization | 1,521 | 1,386 | 3,019 | 2,748 | |
EBITDA | $ 1,320 | $ 1,488 | $ 2,720 | $ 2,914 | |
Total Operating Revenues | $ 4,313 | $ 4,755 | $ 8,781 | $ 9,668 | |
Operating Income Margin | (4.7) % | 2.1 % | (3.4) % | 1.7 % | |
EBITDA Margin | 30.6 % | 31.3 % | 31.0 % | 30.1 % | |
Consumer Wireline | |||||
Operating Income | $ 335 | $ 184 | $ 684 | $ 397 | |
Add: Depreciation and amortization | 958 | 914 | 1,907 | 1,795 | |
EBITDA | $ 1,293 | $ 1,098 | $ 2,591 | $ 2,192 | |
Total Operating Revenues | $ 3,541 | $ 3,347 | $ 7,063 | $ 6,697 | |
Operating Income Margin | 9.5 % | 5.5 % | 9.7 % | 5.9 % | |
EBITDA Margin | 36.5 % | 32.8 % | 36.7 % | 32.7 % | |
Latin America Segment | |||||
Operating Income | $ 46 | $ 6 | $ 89 | $ 9 | |
Add: Depreciation and amortization | 155 | 172 | 305 | 349 | |
EBITDA | $ 201 | $ 178 | $ 394 | $ 358 | |
Total Operating Revenues | $ 1,054 | $ 1,103 | $ 2,025 | $ 2,166 | |
Operating Income Margin | 4.4 % | 0.5 % | 4.4 % | 0.4 % | |
EBITDA Margin | 19.1 % | 16.1 % | 19.5 % | 16.5 % | |
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 | ||||
2025 | 2024 | 2025 | 2024 | ||
Operating Expenses | |||||
Transaction, legal and other costs1 | $ 49 | $ 35 | $ 128 | $ 67 | |
Benefit-related (gain) loss | (70) | (10) | (64) | (49) | |
Asset impairments and abandonments and restructuring | — | 480 | 504 | 639 | |
Adjustments to Operations and Support Expenses | (21) | 505 | 568 | 657 | |
Amortization of intangible assets | 9 | 15 | 18 | 30 | |
Adjustments to Operating Expenses | (12) | 520 | 586 | 687 | |
Other | |||||
Equity in net income of DIRECTV | (503) | (350) | (1,926) | (674) | |
Benefit-related (gain) loss, impairments of investments and other | (189) | (16) | (125) | 238 | |
Adjustments to Income Before Income Taxes | (704) | 154 | (1,465) | 251 | |
Tax impact of adjustments | (168) | 35 | (333) | 57 | |
Adjustments to Net Income | $ (536) | $ 119 | $ (1,132) | $ 194 | |
Preferred stock redemption gain | — | — | (90) | — | |
Adjustments to Net Income Attributable to Common Stock | $ (536) | $ 119 | $ (1,222) | $ 194 | |
1 Includes costs associated with legacy legal matters and the expected resolution of certain litigation associated with cyberattacks disclosed | |||||
Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBITDA service 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, Adjusted EBITDA service 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 | ||||
2025 | 2024 | 2025 | 2024 | ||
Operating Income | $ 6,501 | $ 5,760 | $ 12,255 | $ 11,607 | |
Adjustments to Operating Expenses | (12) | 520 | 586 | 687 | |
Adjusted Operating Income | $ 6,489 | $ 6,280 | $ 12,841 | $ 12,294 | |
EBITDA | $ 11,752 | $ 10,832 | $ 22,696 | $ 21,726 | |
Adjustments to Operations and Support Expenses | (21) | 505 | 568 | 657 | |
Adjusted EBITDA | $ 11,731 | $ 11,337 | $ 23,264 | $ 22,383 | |
Total Operating Revenues | $ 30,847 | $ 29,797 | $ 61,473 | $ 59,825 | |
Operating Income Margin | 21.1 % | 19.3 % | 19.9 % | 19.4 % | |
Adjusted Operating Income Margin | 21.0 % | 21.1 % | 20.9 % | 20.5 % | |
Adjusted EBITDA Margin | 38.0 % | 38.0 % | 37.8 % | 37.4 % | |
Adjusted Diluted EPS | |||||
Second Quarter | Six-Month Period | ||||
2025 | 2024 | 2025 | 2024 | ||
Diluted Earnings Per Share (EPS) | $ 0.62 | $ 0.49 | $ 1.22 | $ 0.96 | |
Equity in net income of DIRECTV | (0.05) | (0.04) | (0.21) | (0.07) | |
Restructuring and impairments | — | 0.05 | 0.05 | 0.11 | |
Benefit-related, transaction, legal and other items | (0.03) | 0.01 | (0.01) | (0.01) | |
Adjusted EPS | $ 0.54 | $ 0.51 | $ 1.05 | $ 0.99 | |
Year-over-year growth - Adjusted | 5.9 % | 6.1 % | |||
Weighted Average Common Shares Outstanding with Dilution (000,000) | 7,219 | 7,198 | 7,221 | 7,195 | |
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 - 2025 | |||||||||
Dollars in millions | |||||||||
Three Months Ended | |||||||||
Sept. 30, | Dec. 31, | March 31, | June 30, | Four | |||||
20241 | 20241 | 20251 | 2025 | ||||||
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 23, 2025. | |||||||||
Net Debt to Adjusted EBITDA - 2024 | |||||||||
Dollars in millions | |||||||||
Three Months Ended | |||||||||
Sept. 30, | Dec. 31, | March 31, | June 30, | Four | |||||
20231 | 20231 | 20241 | 20241 | ||||||
Adjusted EBITDA | $ 11,203 | $ 10,555 | $ 11,046 | $ 11,337 | $ 44,141 | ||||
End-of-period current debt | 5,249 | ||||||||
End-of-period long-term debt | 125,355 | ||||||||
Total End-of-Period Debt | 130,604 | ||||||||
Less: Cash and Cash Equivalents | 3,093 | ||||||||
Less: Time Deposits | 650 | ||||||||
Net Debt Balance | 126,861 | ||||||||
Annualized Net Debt to Adjusted EBITDA Ratio | 2.87 | ||||||||
1 As reported in AT&T's Form 8-K filed April 23, 2025. | |||||||||
Supplemental Operational Measures
As a supplemental presentation to our Communications segment operating results, we are providing a view of our AT&T Business Solutions results which includes both wireless and fixed operations. This combined view presents a complete profile of the entire business customer relationship and underscores the importance of mobile solutions to serving our business customers. Our supplemental presentation of business solutions operations is calculated by combining our Mobility and Business Wireline operating units, and then adjusting to remove non-business operations. The following table presents a reconciliation of our supplemental Business Solutions results. Prior period amounts have been conformed to the current period's presentation.
Supplemental Operational Measures | ||||||||||
Second Quarter | ||||||||||
June 30, 2025 | June 30, 2024 | |||||||||
Mobility | Business | Adj.1 | Business Solutions | Mobility | Business | Adj.1 | Business Solutions | Percent Change | ||
Operating Revenues | ||||||||||
Wireless service | $ 16,853 | $ — | $ (14,390) | $ 2,463 | $ 16,277 | $ — | $ (13,809) | $ 2,468 | (0.2) % | |
Legacy and other transitional | — | 2,349 | — | 2,349 | — | 2,839 | — | 2,839 | (17.3) % | |
Fiber and advanced | — | 1,793 | — | 1,793 | — | 1,732 | — | 1,732 | 3.5 % | |
Wireless equipment | 4,992 | — | (4,168) | 824 | 4,203 | — | (3,459) | 744 | 10.8 % | |
Wireline equipment | — | 171 | — | 171 | — | 184 | — | 184 | (7.1) % | |
Total Operating Revenues | 21,845 | 4,313 | (18,558) | 7,600 | 20,480 | 4,755 | (17,268) | 7,967 | (4.6) % | |
Operating Expenses | ||||||||||
Operations and support | 12,358 | 2,993 | (10,072) | 5,279 | 11,285 | 3,267 | (9,201) | 5,351 | (1.3) % | |
EBITDA | 9,487 | 1,320 | (8,486) | 2,321 | 9,195 | 1,488 | (8,067) | 2,616 | (11.3) % | |
Depreciation and amortization | 2,556 | 1,521 | (2,098) | 1,979 | 2,476 | 1,386 | (2,025) | 1,837 | 7.7 % | |
Total Operating Expenses | 14,914 | 4,514 | (12,170) | 7,258 | 13,761 | 4,653 | (11,226) | 7,188 | 1.0 % | |
Operating Income (Loss) | $ 6,931 | $ (201) | $ (6,388) | $ 342 | $ 6,719 | $ 102 | $ (6,042) | $ 779 | (56.1) % | |
Operating Income Margin | 4.5 % | 9.8 % | (530) BP | |||||||
1 Non-business wireless reported in the Communications segment under the Mobility business unit. | ||||||||||
Supplemental Operational Measures | ||||||||||
Six-Month Period | ||||||||||
June 30, 2025 | June 30, 2024 | |||||||||
Mobility | Business | Adj.1 | Business Solutions | Mobility | Business | Adj.1 | Business Solutions | Percent | ||
Operating Revenues | ||||||||||
Wireless service | $ 33,504 | $ — | $ (28,592) | $ 4,912 | $ 32,271 | $ — | $ (27,417) | $ 4,854 | 1.2 % | |
Legacy and other transitional | — | 4,824 | — | 4,824 | — | 5,836 | — | 5,836 | (17.3) % | |
Fiber and advanced | — | 3,573 | — | 3,573 | — | 3,435 | — | 3,435 | 4.0 % | |
Wireless equipment | 9,911 | — | (8,304) | 1,607 | 8,803 | — | (7,293) | 1,510 | 6.4 % | |
Wireline equipment | — | 384 | — | 384 | — | 397 | — | 397 | (3.3) % | |
Total Operating Revenues | 43,415 | 8,781 | (36,896) | 15,300 | 41,074 | 9,668 | (34,710) | 16,032 | (4.6) % | |
Operating Expenses | ||||||||||
Operations and support | 24,662 | 6,061 | (20,178) | 10,545 | 22,924 | 6,754 | (18,727) | 10,951 | (3.7) % | |
EBITDA | 18,753 | 2,720 | (16,718) | 4,755 | 18,150 | 2,914 | (15,983) | 5,081 | (6.4) % | |
Depreciation and amortization | 5,082 | 3,019 | (4,160) | 3,941 | 4,963 | 2,748 | (4,058) | 3,653 | 7.9 % | |
Total Operating Expenses | 29,744 | 9,080 | (24,338) | 14,486 | 27,887 | 9,502 | (22,785) | 14,604 | (0.8) % | |
Operating Income | $ 13,671 | $ (299) | $ (12,558) | $ 814 | $ 13,187 | $ 166 | $ (11,925) | $ 1,428 | (43.0) % | |
Operating Income Margin | 5.3 % | 8.9 % | (360) BP | |||||||
1 Non-business wireless reported in the Communications segment under the Mobility business unit. | ||||||||||
* 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.
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