T — AT&T Inc.

AT&T Q2 2026 Earnings Call Summary

1. Key Financial Results and Metrics

• Total Revenues: Increased by 2.3% year-over-year, driven by a 2.7% rise in service revenue.
• Adjusted EBITDA: Up 5.2% year-over-year, with an adjusted EBITDA margin of 39.1%, the highest since the company's refocus on Advanced Connectivity.
• Adjusted EPS: Reported at $0.65, a 20% increase from $0.54 in the prior year.
• Free Cash Flow: Increased to $4.7 billion, exceeding guidance of $4 billion-$4.5 billion.
• Capital Investment: Rose to $6.1 billion from $5.1 billion year-over-year, with expectations of $23 billion-$24 billion for the full year.

2. Strategic Updates and Business Highlights

• Subscriber Growth: Added over 1 million Advanced Connectivity subscribers, with record net additions in fiber and fixed wireless.
• Converged Customers: 42.5% of advanced home internet customers also have a postpaid wireless account, increasing to 45% when excluding Lumen-acquired customers.
• Fiber Expansion: Plans to reach 8 million new locations, including 4 million from Lumen, marking the largest fiber expansion year.
• Cost Transformation: On track to achieve $4 billion in annual cost savings by 2028, with ongoing efforts to exit inefficient copper-based services.
• Share Repurchases: Increased buyback target for 2026 to approximately $10 billion, up from $8 billion.

3. Forward Guidance and Outlook

• Service Revenue Growth: Expected to continue in the low single-digit range for the full year, with Advanced Connectivity service revenues projected to grow over 5%.
• Adjusted EBITDA Growth: Anticipated to grow in the range of 3%-4% for the full year.
• Free Cash Flow: Expected to exceed $18 billion for the year, with stable cash flow anticipated in Q3 and strong growth in Q4.

4. Bad News, Challenges, or Points of Concern

• Legacy Segment Decline: Service revenues in the legacy segment fell by 26% year-over-year, with EBITDA down 46% as the company accelerates the shutdown of its copper network.
• Fiber ARPU Pressure: Fiber average revenue per user (ARPU) declined by 1.3%, primarily due to the lower ARPU from Lumen-acquired subscribers.
• Market Competition: Concerns about potential competition from satellite providers like Starlink, although AT&T emphasizes its strong market position and capabilities.

5. Notable Q&A Insights

• Customer Behavior: Churn rates have improved, attributed to better convergence strategies and a slowdown in device upgrades. The company is focusing on maintaining customer loyalty through bundled services.
• AI Traffic Monetization: AT&T anticipates significant growth in network traffic driven by AI, with plans to prioritize high-value mobility traffic and differentiate services to monetize this growth effectively.
• Capital Allocation: The board is actively discussing future capital allocation strategies, balancing share buybacks, debt reduction, and fiber expansion based on market conditions and stock valuation.

Overall, AT&T reported solid financial performance in Q2 2026, driven by strong subscriber growth and operational efficiencies, while navigating challenges in its legacy business and competitive landscape. The company remains optimistic about its strategic direction and future growth potential.