01—Abstract
Summary
Summary of the 8-K filed July 23, 2025. Cited figures are marked; the original filing is the authoritative source.
AT&T (T) reported second-quarter 2025 results on July 23, 2025, showing top-line and earnings growth.
Consolidated revenues rose 3.5% year over year to $30.8 billiona, GAAP diluted EPS was $0.62 (vs. $0.49), and adjusted EPS was $0.54 (vs. $0.51, up 5.9%). Adjusted EBITDA reached $11.7 billion (up about 3.4%), and free cash flow was $4.4 billion (vs. $4.0 billion). Growth was driven by Mobility, where service revenue grew 3.5% and postpaid phone net adds were 401,000, and by Consumer Wireline, where fiber revenue grew 18.9% and fiber net adds were 243,000.
Business Wireline remained weak, with revenue down 9.3% as legacy services declined 17.3%. Postpaid phone churn rose to 0.87% from 0.70% a year earlier, a point investors should monitor. The company also closed the sale of its remaining 70% DIRECTV stake to TPG on July 2, 2025, and repurchased about $1.0 billionb of common stock in the quarter.
Management highlighted tax savings of $6.5 to $8.0 billionc over 2025-2027 from the One Big Beautiful Bill Act. AT&T plans to reinvest $3.5 billion of these savings in fiber, targeting 4 million locations built per year by the end of 2026, and to contribute $1.5 billion to its pension plan. Full-year 2025 guidance was set for adjusted EPS of $1.97 to $2.07, free cash flow in the low-to-mid $16 billion range, and capital investment of $22 to $22.5 billion.
Management raised its 2026-2027 capital investment outlook to $23 to $24 billiond annually, while free cash flow is expected to reach $18 billion or more in 2026 and $19 billion or more in 2027. Total debt was $132.3 billion and net debt was $120.3 billion, or about 2.64x annualized net debt to adjusted EBITDA. For investors, the quarter reflects steady execution on the convergence strategy, with wireless and fiber growth offsetting continued legacy wireline declines.
The DIRECTV exit, tax-driven cash flow improvement, and fiber acceleration are the main drivers of the medium-term outlook. Key risks include elevated competitive intensity in wireless, rising churn, the continued decline in Business Wireline, and execution risk on the Lumen Mass Markets fiber acquisition and the accelerated build-out.
02—Key points
Key Highlights
- Consolidated revenue of $30.8 billion, up 3.5% year over year, with Mobility service revenue up 3.5% to $16.9 billion
- GAAP diluted EPS of $0.62 vs. $0.49 a year ago; adjusted EPS of $0.54 vs. $0.51 (+5.9%), with the gap driven mainly by DIRECTV equity income
- Adjusted EBITDA of $11.7 billion (up from $11.3 billion); free cash flow of $4.4 billion (up from $4.0 billion)
- Strong subscriber growth: 401,000 postpaid phone net adds, 243,000 AT&T Fiber net adds, and 203,000 AT&T Internet Air net adds; Consumer Fiber broadband revenue up 18.9%
- Postpaid phone churn increased to 0.87% from 0.70% year over year, a watch item for the wireless business
- Closed the sale of its remaining 70% DIRECTV stake to TPG on July 2, 2025; repurchased about $1.0 billion of common stock in the quarter
- Raised 2026-2027 capital investment outlook to $23-24 billion annually; expects free cash flow of $18 billion+ in 2026 and $19 billion+ in 2027, supported by $6.5-8.0 billion of cash tax savings over 2025-2027
03—Questions
Frequently Asked Questions
Why did AT&T's GAAP EPS jump to $0.62 while adjusted EPS rose only modestly to $0.54?
GAAP EPS includes $0.05 of equity income from DIRECTV and about $0.03 of benefit-related, transaction, and other gains, which AT&T excludes from adjusted EPS. Because DIRECTV was sold on July 2, 2025, management strips out that income to show underlying operating performance, and adjusted EPS of $0.54 is the better gauge of core earnings growth (up 5.9%).
What is driving growth in the business, and where is the weakness?
Growth came from Mobility (service revenue up 3.5%, postpaid phone ARPU up 1.1%) and Consumer Wireline (revenue up 5.8%, broadband revenue up 10.5%, fiber revenue up 18.9%). Business Wireline is the weak spot: revenue fell 9.3% and EBITDA fell 11.3%, as legacy and transitional services dropped 17.3%. Management guides to a low-double-digit decline in Business Wireline EBITDA for full-year 2025.
How will the tax savings from the One Big Beautiful Bill Act be used?
AT&T expects $6.5-8.0 billion of cash tax savings over 2025-2027 relative to prior guidance. Of this, it plans to invest $3.5 billion to accelerate fiber build-out to 4 million locations per year by the end of 2026, and contribute $1.5 billion to its pension plan by the end of 2026. The remainder will go toward financial flexibility, including strategic investments, incremental shareholder returns, and debt repayment.
Is AT&T's balance sheet and leverage under control?
Total debt was $132.3 billion and net debt was $120.3 billion at June 30, 2025, equal to about 2.64x annualized net debt to adjusted EBITDA. Cash rose to $10.5 billion from $3.3 billion at year-end 2024, partly because of the DIRECTV sale and debt issuance. The company continues to target shareholder returns, with $4 billion in planned 2025 repurchases, including about $1.3 billion completed year to date.
What are the key risks to the outlook?
Key risks include intense wireless and broadband competition, which has pushed postpaid phone churn up 17 basis points year over year; continued legacy declines in Business Wireline; execution risk on the Lumen Mass Markets fiber acquisition and the accelerated fiber build-out; and the dependence of projected free cash flow on pension funding and capital spending. The 2025 adjusted EPS and EBITDA guidance also excludes a non-cash mark-to-market pension item that is not yet estimable.
04—Continue