01—Abstract
Summary
Summary of the 8-K filed January 27, 2025. Cited figures are marked; the original filing is the authoritative source.
AT&T's Q4 2024 results, filed via 8-K on January 27, 2025, show a company that met all of its 2024 consolidated financial guidance and reiterated its 2025 and long-term outlook.
Fourth-quarter revenue rose 0.9% to $32.3 billiona, GAAP diluted EPS was $0.56 (adjusted EPS $0.54, flat year over year), and adjusted EBITDA was $10.8 billion. Growth was led by Mobility service revenue (up 3.3%) and Consumer Wireline broadband (up 7.8%, with 307,000 fiber net adds), while Business Wireline revenue fell 10.0% and EBITDA dropped 22.0%. Free cash flow was $4.8 billion, down $1.5 billion year over year, which management attributes to a more ratable quarterly cadence rather than a deterioration in underlying cash generation.
Full-year 2024 results were mixed on the GAAP line. Revenue was flat at $122.3 billionb and GAAP operating income fell 18.8% to $19.0 billion, mainly because of a $4.4 billion non-cash goodwill impairment in Q3 and Open RAN-related accelerated depreciation. Adjusted operating income declined modestly to $24.2 billion and adjusted EBITDA rose 3.2% to $44.8 billion.
Free cash flow reached $17.6 billionc, and net debt ended the year at $120.1 billion, or about 2.68x adjusted EBITDA on an annualized basis. Looking ahead, AT&T guided 2025 adjusted EBITDA growth of 3% or better, capital investment of about $22 billion, and free cash flow excluding DIRECTV of $16 billion or more. Beginning in Q1 2025, the company will change how it defines adjusted EPS and free cash flow to exclude DIRECTV, reflecting the planned sale of its 70% stake to TPG, expected to close in mid-2025.
Management also expects to begin share repurchases in the second half of 2025. Investors should watch execution on fiber growth, the pace of Business Wireline decline, and the DIRECTV transaction's closing and proceeds.
02—Key points
Key Highlights
- Met all 2024 consolidated financial guidance and reiterated all 2025 and long-term financial and operational guidance.
- Q4 2024 revenue of $32.3B (+0.9% YoY); GAAP diluted EPS of $0.56 vs. $0.30 a year ago, with adjusted EPS of $0.54, flat YoY.
- Full-year 2024 GAAP operating income fell 18.8% to $19.0B due to a $4.4B non-cash goodwill impairment; adjusted EBITDA rose to $44.8B (vs. $43.4B).
- Strong consumer growth: 307K AT&T Fiber net adds in Q4 (1.0M for the year) and Consumer Wireline broadband revenue up 7.8%.
- Mobility service revenue up 3.3% in Q4 with 482K postpaid phone net adds and 0.85% postpaid phone churn; Business Wireline revenue down 10.0% and EBITDA down 22.0%.
- Free cash flow was $17.6B for FY2024 (+$0.9B YoY), though Q4 FCF fell to $4.8B on cadence timing; net debt of $120.1B at ~2.68x adjusted EBITDA.
- 2025 outlook includes adjusted EBITDA growth of 3%+, ~$22B capital investment, and FCF excluding DIRECTV of $16B+; DIRECTV stake sale to TPG expected to close mid-2025, with buybacks starting in 2H25.
03—Questions
Frequently Asked Questions
Did AT&T meet its 2024 financial guidance?
Yes. Management stated the company met all of its 2024 consolidated financial guidance, and full-year adjusted EBITDA of $44.8B and free cash flow of $17.6B were both up year over year.
Why did GAAP operating income fall so sharply in 2024?
Full-year GAAP operating income dropped 18.8% to $19.0B, mainly because of a $4.4B non-cash goodwill impairment recorded in Q3 2024. Accelerated depreciation tied to Open RAN network modernization also raised costs. On an adjusted basis, operating income was $24.2B versus $24.7B in 2023.
How will the DIRECTV sale and the new non-GAAP definitions change reported results?
Starting with Q1 2025 reporting, AT&T will remove DIRECTV equity income from adjusted EPS and exclude DIRECTV-related cash flows from free cash flow. For 2024, adjusted EPS excluding DIRECTV would have been $1.95 and free cash flow excluding DIRECTV $15.3B. The sale of its 70% stake to TPG is expected to close in mid-2025.
What is driving the weakness in Business Wireline, and how does it compare with Consumer growth?
Business Wireline revenue fell 10.0% in Q4 due to lower demand for legacy voice and data services, product simplification, and the contribution of its cybersecurity business to LevelBlue in Q2 2024. EBITDA fell 22.0%. Management guides 2025 Business Wireline EBITDA to decline in the mid-teens percentage range. Consumer Wireline grew, with fiber revenue up 17.8% and EBITDA up 9.8%, and 2025 consumer fiber broadband revenue is guided to grow in the mid-teens.
What is AT&T's 2025 outlook and capital allocation plan?
For 2025, AT&T expects adjusted EBITDA growth of 3% or better, capital investment of about $22B, FCF excluding DIRECTV of $16B or more, and adjusted EPS excluding DIRECTV of $1.97 to $2.07. It expects net debt to adjusted EBITDA of about 2.5x in 1H25 and plans to begin share repurchases in the second half of 2025.
04—Continue