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

Telecommunications Industry Analyst

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 $30.8 billion, up 3.5% year-over-year, driven primarily by growth in Mobility and Consumer Wireline segments. The company's disciplined execution is evident in their 401,000 postpaid phone net additions with controlled churn of 0.87%, alongside 243,000 AT&T Fiber net adds and 203,000 AT&T Internet Air net adds.

The financial performance shows marked improvement with diluted EPS reaching $0.62 versus $0.49 a year ago, while adjusted EPS grew to $0.54 from $0.51. Free cash flow increased to $4.4 billion from $4.0 billion in the year-ago quarter, demonstrating the company's strengthening cash generation capabilities.

Particularly noteworthy is AT&T's fiber business momentum, with consumer fiber broadband revenues increasing by an impressive 18.9% year-over-year to $2.1 billion. This growth underscores the success of AT&T's strategic focus on high-speed connectivity services. The Mobility segment also performed well with service revenue growth of 3.5% and EBITDA growth of 3.2%.

The company's announcement of $6.5 to $8.0 billion in expected cash tax savings during 2025-2027 from the One Big Beautiful Bill Act represents a significant windfall. AT&T plans to strategically allocate these savings by investing $3.5 billion to accelerate fiber deployment to 4 million locations per year by end of 2026, contributing $1.5 billion to employee pension plans, and maintaining flexibility for additional investments and capital returns.

AT&T has raised guidance for 2025, now expecting free cash flow in the low-to-mid $16 billion range and adjusted EPS of $1.97 to $2.07. The company also updated its 2026-2027 outlook, projecting free cash flow to reach $18 billion+ in 2026 and $19 billion+ in 2027, reflecting the impact of tax savings and continued operational improvements.

Financial Analyst

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 $6.5 billion (up from $5.8 billion year-over-year) and net income of $4.9 billion (up from $3.9 billion), representing substantial bottom-line growth that exceeds top-line revenue growth of 3.5%.

Cash generation has notably strengthened, with cash from operations reaching $9.8 billion (up from $9.1 billion) and free cash flow of $4.4 billion (up from $4.0 billion). This improved cash position has enabled AT&T to repurchase approximately $1.0 billion in common shares during the quarter while maintaining financial flexibility.

The segment breakdown reveals divergent performance patterns. The Consumer Wireline segment stands out with EBITDA growth of 17.8% year-over-year, primarily driven by fiber expansion, while Business Wireline continues to face challenges with an EBITDA decline of 11.3% due to legacy service pressure. Mobility, the largest segment, delivered 3.2% EBITDA growth.

The most significant financial development is the $6.5-$8.0 billion expected tax savings through 2027. AT&T's capital allocation plan for these savings represents a balanced approach between network investment ($3.5 billion), pension funding ($1.5 billion), and maintaining flexibility for additional strategic priorities.

The updated guidance reflects confidence in AT&T's operational trajectory, with free cash flow projected to grow from the low-to-mid $16 billion range in 2025 to $19+ billion by 2027. This represents substantial improvement in cash generation capability, providing increased capacity for debt reduction, dividend coverage, and strategic investments.

From a balance sheet perspective, AT&T's total debt of $132.3 billion and net debt of $120.3 billion remain substantial, though the improved free cash flow outlook enhances the company's debt servicing capabilities. The sale of the remaining 70% stake in DIRECTV further streamlines operations and strengthens the balance sheet.

Company delivers robust, high-quality 5G and fiber subscriber growth as more customers choose converged connectivity services

DALLAS, July 23, 2025 /PRNewswire/ -- AT&T Inc. (NYSE: T) reported strong second-quarter results that demonstrate its ability to grow the right way by attracting high-quality 5G and fiber subscribers, while growing service revenues, resulting in improved consolidated revenues and earnings growth.

"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, versus $0.49 a year ago; adjusted EPS* of $0.54, versus $0.51 a year ago
• Operating income of $6.5 billion; adjusted operating income* of $6.5 billion
• Net income of $4.9 billion; adjusted EBITDA* of $11.7 billion
• Cash from operating activities of $9.8 billion, versus $9.1 billion a year ago
• Capital expenditures of $4.9 billion; capital investment* of $5.1 billion
• Free cash flow* of $4.4 billion, versus $4.0 billion a year ago

Second-Quarter Highlights

• 401,000 postpaid phone net adds with postpaid phone churn of 0.87%
• Mobility service revenues of $16.9 billion, up 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, up 18.9% year over year
• Repurchased approximately $1.0 billion in common shares
• 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 $6.5 to $8.0 billion of cash tax savings during 2025-2027 relative to the guidance it provided at its 2024 Analyst & Investor Day due to tax provisions in the One Big Beautiful Bill Act. This reflects estimated savings of $1.5 to $2.0 billion in 2025 and $2.5 to $3.0 billion in each of 2026 and 2027.

The Company intends to invest $3.5 billion of these savings into its network to accelerate its fiber internet build-out to a pace of 4 million locations per year, a run-rate it expects to achieve by the end of 2026. As a result of this increased pace of organic fiber deployment, AT&T expects that by the end of 2030 it will 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 it has agreed to acquire and plans to expand, its Gigapower joint venture, and agreements with other commercial open access providers¹.

AT&T also intends to contribute $1.5 billion of these savings to its employee pension plan by the end of 2026, which would result in approximately 95% funding of the plan². The remaining tax savings will add to AT&T's financial flexibility to support additional strategic investments, incremental capital returns and debt repayment, among other potential uses.

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.
• 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.
• Capital investment* in the $22 to $22.5 billion range.
• Free cash flow* in the low-to-mid $16 billion range, including over half of the planned pension funding through 2026 discussed above.
• Adjusted EPS* of $1.97 to $2.07.
• Share repurchases of $4 billion for 2025, including approximately $1.3 billion completed year to date.

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 to $24 billion range annually from 2026-2027.
• Free cash flow* of $18 billion+ in 2026 and $19 billion+ in 2027.

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, versus $29.8 billion in the year-ago quarter, up 3.5%. This was due to higher Mobility and Consumer Wireline revenues, partially offset by declines in Business Wireline and Mexico, which included unfavorable foreign exchange impacts.
• Operating expenses were $24.3 billion, versus $24.0 billion in the year-ago quarter. Operating expenses increased, primarily due to higher equipment costs associated with higher wireless equipment revenues, and higher network-related costs. Additionally, depreciation increased from our continued fiber investment and network upgrades, partially offset by lower impacts from our Open RAN network modernization efforts. These increases were partially offset by expense declines from restructuring costs in the year-ago quarter and continued transformation efforts.
• Operating income was $6.5 billion, versus $5.8 billion in the year-ago quarter. When adjusting for certain items, adjusted operating income* was $6.5 billion, versus $6.3 billion in the year-ago quarter.
• Equity in net income of affiliates was $0.5 billion, versus $0.3 billion in the year-ago quarter, reflecting cash distributions received by AT&T in excess of the carrying amount of our investment in DIRECTV.
• Net income was $4.9 billion, versus $3.9 billion in the year-ago quarter.
• Net income attributable to common stock was $4.5 billion, versus $3.5 billion in the year-ago quarter. Earnings per diluted common share was $0.62, versus $0.49 in the year-ago quarter. Adjusting for $(0.08) which removes equity in net income of DIRECTV and excludes other items, adjusted earnings per diluted common share* was $0.54, versus $0.51 in the year-ago quarter.
• Adjusted EBITDA* was $11.7 billion, versus $11.3 billion in the year-ago quarter.
• Cash from operating activities was $9.8 billion, versus $9.1 billion in the year-ago quarter, reflecting operational growth and higher distributions from DIRECTV, partially offset by higher cash tax payments.
• Capital expenditures were $4.9 billion, versus $4.4 billion in the year-ago quarter. Capital investment* totaled $5.1 billion, versus $4.9 billion in the year-ago quarter. Cash payments for vendor financing totaled $0.2 billion, versus $0.6 billion in the year-ago quarter.
• Free cash flow,* which excludes cash flows from DIRECTV, was $4.4 billion, versus $4.0 billion in the year-ago quarter.
• Total debt was $132.3 billion at the end of the second quarter, and net debt* was $120.3 billion.

Segment and Business Unit Results

Communications segment revenues were $29.7 billion, up 3.9% year over year, with operating income up 0.9% year over year.

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 3.5% year over year driving EBITDA* growth of 3.2%. Postpaid phone net adds were 401,000 with postpaid phone ARPU up 1.1% year over year.

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 %
EBITDA Margin*	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 6.7% year over year driven by service revenue growth of 3.5% from postpaid phone average revenue per subscriber (ARPU) growth and subscriber gains, as well as equipment revenue growth of 18.8% from higher wireless device sales volumes. Operating expenses were up 8.4% year over year due to higher equipment expenses driven by higher wireless sales volumes and the sale of higher-priced devices. This increase also reflects higher network costs, higher advertising and promotion costs, and increased depreciation expense. Operating income was $6.9 billion, up 3.2% year over year. EBITDA* was $9.5 billion, up $292 million year over year.

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 9.3% year over year due to declines in legacy and other transitional services of 17.3%, partially offset by growth in fiber and advanced connectivity services of 3.5%. Operating expenses were down 3.0% year over year due to lower personnel and lower customer support costs associated with ongoing transformation initiatives, partially offset by higher depreciation expense due to ongoing investment for strategic initiatives such as fiber. Operating income was $(201) million, versus $102 million in the year-ago quarter, and EBITDA* was $1.3 billion, down $168 million year over year.

Consumer Wireline achieved strong broadband revenue growth driven by an 18.9% increase in fiber revenue growth. Consumer Wireline also delivered positive broadband net adds for the eighth consecutive quarter, driven by 243,000 AT&T Fiber net adds and 203,000 AT&T Internet Air net adds.

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 5.8% year over year driven by broadband revenue growth of 10.5% due to fiber revenue growth of 18.9%, partially offset by declines in legacy voice and data services and other services. Operating expenses were up 1.4% year over year, primarily due to higher depreciation expense driven by fiber investment, higher network-related costs, and higher marketing costs, partially offset by lower customer support, lower costs associated with transformation initiatives, and lower content licensing costs. Operating income was $335 million, versus $184 million in the year-ago quarter, and EBITDA* was $1.3 billion, up $195 million year over year.

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)

Latin America segment revenues were down 4.4% year over year, primarily due to unfavorable impacts of foreign exchange rates, partially offset by higher equipment sales, and subscriber and ARPU growth. Operating expenses were down 8.1% due to the favorable impacts of foreign exchange rates, partially offset by higher equipment and selling costs resulting from higher sales. Operating income was $46 million compared to $6 million in the year-ago quarter. EBITDA* was $201 million, compared to $178 million in the year-ago quarter.

1Locations reached with fiber include consumer and business locations: (i) passed with fiber, and (ii) served with fiber through commercial open-access providers. 2Based on pension funded status at December 31, 2024. 3Excludes migrations between wireless subscriber categories, including connected devices, and acquisition-related activity during the period.

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 140+ 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 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 25%.

For 2Q25, adjusted EPS of $0.54 is diluted EPS of $0.62 minus $0.05 equity in net income of DIRECTV and minus $0.03 benefit-related, transaction, legal and other items. For 2Q24, adjusted EPS of $0.51 is diluted EPS of $0.49 adjusted for $0.05 restructuring and $0.01 benefit-related, transaction legal and other items, minus $0.04 equity in net income of DIRECTV. Transaction, legal and other costs include costs associated with legacy legal matters and the expected resolution of certain litigation associated with cyberattacks disclosed in 2024, which is presented net of expected insurance recoveries. The Company expects adjustments to 2025 reported diluted EPS to include a gain recognized on the sale of DIRECTV in 3Q25, an adjustment to remove equity in net income of DIRECTV (prior to the July 2, 2025 transaction close), a non-cash mark-to-market benefit plan gain/loss, and other items. The Company expects the mark-to-market adjustment, which is driven by interest rates and investment returns that are not reasonably estimable at this time, to be a significant item. Our projected 2025-2027 adjusted EPS depends on future levels of revenues and expenses, most of 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.

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 $6.5 billion is calculated as operating income of $6.5 billion minus $12 million of adjustments. For 2Q24, adjusted operating income of $6.3 billion is calculated as operating income of $5.8 billion plus $520 million of adjustments. Adjustments for all periods are detailed in the Discussion and Reconciliation of Non-GAAP Measures included in our Form 8-K dated July 23, 2025.

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 $11.7 billion is calculated as net income of $4.9 billion, plus income tax expense of $1.2 billion, plus interest expense of $1.7 billion, minus equity in net income of affiliates of $0.5 billion, minus other income (expense) – net of $0.8 billion, plus depreciation and amortization of $5.3 billion, minus adjustments of $21 million. For 2Q24, adjusted EBITDA of $11.3 billion is calculated as net income of $3.9 billion, plus income tax expense of $1.1 billion, plus interest expense of $1.7 billion, minus equity in net income of affiliates of $0.3 billion, minus other income (expense) – net of $0.7 billion, plus depreciation and amortization of $5.1 billion, plus adjustments of $505 million. Adjustments for all periods are detailed in the Discussion and Reconciliation of Non-GAAP Measures included in our Form 8-K dated July 23, 2025.

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 $4.4 billion is cash from operating activities of $9.8 billion, less cash distributions from DIRECTV classified as operating activities of $0.5 billion, less cash taxes paid on DIRECTV of $0.3 billion, minus capital expenditures of $4.9 billion and cash paid for vendor financing of $0.2 billion. For 2Q24, free cash flow of $4.0 billion is cash from operating activities of $9.1 billion, less cash distributions from DIRECTV classified as operating activities of $0.4 billion, less cash taxes paid on DIRECTV of $0.1 billion, minus capital expenditures of $4.4 billion and cash paid for vendor financing of $0.6 billion. Due to high variability and difficulty in predicting items that impact cash from operating activities, capital expenditures, and vendor financing payments, the Company is not able to provide reconciliations between projected free cash flow for 2025-2027 and the most comparable GAAP metrics without unreasonable effort.

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 ($0.2 billion in 2Q25, $0.6 billion in 2Q24). Due to high variability and difficulty in predicting items that impact capital expenditures and vendor financing payments, the Company is not able to provide reconciliations between projected capital investment for 2025-2027 and the most comparable GAAP metrics without unreasonable effort.

Net debt of $120.3 billion at June 30, 2025, is calculated as total debt of $132.3 billion less cash and cash equivalents of $10.5 billion and time deposits (i.e. deposits at financial institutions that are greater than 90 days) of $1.5 billion.

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). Prior periods have been recast to conform to the current period presentation to remove cash flows and equity in net income from our investment in DIRECTV, which we sold to TPG Capital on July 2, 2025.

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 25%.

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  in 2024, which is presented net of expected insurance recoveries.

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 Quarters
	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 Quarters
	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 Wireline	Adj.1	Business Solutions		Mobility	Business Wireline	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      services	—	2,349	—	2,349		—	2,839	—	2,839	(17.3) %
Fiber and advanced      connectivity services	—	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 Wireline	Adj.1	Business Solutions		Mobility	Business Wireline	Adj.1	Business Solutions	Percent Change
Operating Revenues
Wireless service	$    33,504	$           —	$  (28,592)	$  4,912		$    32,271	$           —	$  (27,417)	$  4,854	1.2 %
Legacy and other transitional      services	—	4,824	—	4,824		—	5,836	—	5,836	(17.3) %
Fiber and advanced      connectivity services	—	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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FAQ

What were AT&T's (T) key financial results for Q2 2025?

AT&T reported Q2 2025 revenues of $30.8 billion (up 3.5%), operating income of $6.5 billion, and diluted EPS of $0.62 (up from $0.49 year-over-year).

How many new subscribers did AT&T add in Q2 2025?

AT&T added 401,000 postpaid phone subscribers, 243,000 AT&T Fiber customers, and 203,000 AT&T Internet Air subscribers in Q2 2025.

What is AT&T's expected tax savings from the One Big Beautiful Bill Act?

AT&T expects $6.5-8.0 billion in tax savings during 2025-2027, with $1.5-2.0 billion in 2025 and $2.5-3.0 billion in each of 2026 and 2027.

What is AT&T's fiber expansion plan and target?

AT&T plans to reach 50 million customer locations with its in-region fiber network by 2030, investing $3.5 billion to accelerate deployment to 4 million locations annually by end of 2026.

What is AT&T's updated financial guidance for 2025?

AT&T projects free cash flow in the low-to-mid $16 billion range, adjusted EPS of $1.97-2.07, and plans $4 billion in share repurchases for 2025.

How much debt does AT&T currently have?

AT&T reported total debt of $132.3 billion and net debt of $120.3 billion at the end of Q2 2025.