AT&T outlines plan to double fiber reach to 60M locations by 2030 while accelerating capital returns

Earnings Call Insights: AT&T Inc. (T) Q2 2025

Management View

• John Stankey, CEO, stated that “halfway through the year, we’ve delivered growth in service revenues, adjusted EBITDA and free cash flow, and we’re positioned to deliver on our full year consolidated financial guidance for 2025.” He emphasized a consistent strategy of investing in 5G and fiber, with significant subscriber additions in both Mobility and broadband.
• Stankey announced that AT&T added over 400,000 postpaid phone customers, 243,000 fiber subscribers, and 203,000 Internet Air net additions in Q2, almost tripling total broadband net adds year-over-year. He noted, “customers continue to choose AT&T because of the simplicity of our offers, the quality of our services and increasingly because they want to be served by one connectivity provider.”
• The company intends to accelerate fiber deployment to a pace of 4 million new locations per year by the end of 2026, aiming to reach approximately 50 million customer locations and more than 60 million fiber locations by 2030 when including the Lumen Mass Markets fiber assets, Gigapower joint venture, and other agreements.
• Stankey highlighted the AT&T Guarantee, stating early results show “improved Net Promoter Scores among our wireless and fiber customers following a network event.”
• Stankey referenced the One Big Beautiful Bill Act, enabling increased investment in fiber and spectrum, and announced plans to contribute $1.5 billion to the pension plan by the end of next year.
• CFO Pascal Desroches reported, “total revenues and adjusted EBITDA each grew 3.5% year-over-year during the second quarter. Adjusted EPS was $0.54 in the quarter, which was up approximately 6% from $0.51 in the prior year.”
• Desroches noted free cash flow of $4.4 billion in Q2, up from $4 billion the prior year, and capital investment of $5.1 billion. He stated, “we repurchased approximately $1 billion of stock, and we have bought back about $300 million so far this quarter.”

Outlook

• Desroches indicated third quarter capital investment is expected in the $5 billion to $5.5 billion range, with free cash flow in the $4.5 billion to $5 billion range.
• Full year guidance for Mobility service revenue growth is raised to 3% or better, up from the previous “high end of the 2% to 3% range.” Mobility EBITDA growth is now expected to be approximately 3% for the year.
• Consumer fiber broadband revenue guidance increased to growth in the “mid- to high-teens” from “mid-teens” previously. Consumer Wireline EBITDA growth guidance is raised to “low- to mid-teens.”
• Business Wireline EBITDA is now expected to decline in the “low double-digit range” versus the initial outlook for a “mid-teens decline.”
• Free cash flow for 2025 is now expected in the “low to mid- $16 billion range” versus prior guidance of “$16 billion plus.”

Financial Results

• Mobility service revenue grew 3.5% with EBITDA growth of 3.2%. Postpaid phone net adds were 401,000. Postpaid phone churn was 0.87%, up 17 basis points year-over-year.
• Consumer Wireline revenue grew 5.8% year-over-year, with approximately 19% growth in fiber revenue. Consumer Wireline EBITDA grew 17.8% for the quarter.
• Business Wireline revenues declined 9.3% year-over-year, with EBITDA declining 11.3%. Operating and support costs in Business Wireline were down nearly $275 million year-over-year.
• Capital investment was $5.1 billion for the quarter. Net leverage remained at 2.64x, nearly unchanged from the first quarter.

Q&A

• John Hodulik, UBS: Questioned wireless churn increase and cost savings from discontinuing copper service. Pascal Desroches replied that churn was impacted by “a higher percentage of our customers coming off of financing contracts” and that cost savings from legacy transformation are already being realized and expected to continue.
• Peter Supino, Wolfe Research: Asked about pricing impact on churn and spectrum acquisition strategy. John Stankey stated, “I don’t view pricing as being our issue in terms of managing churn” and said that spectrum acquisitions can be opportunistically pursued within current capital structure.
• Benjamin Swinburne, Morgan Stanley: Sought insight on fiber build returns and Mobility customer quality. Stankey responded that “all [fiber builds] hit our return rates” and “our converged rate this quarter is actually accelerating.”
• Michael Rollins, Citi: Asked about EBITDA growth pressures and fiber footprint expansion. Desroches pointed to a “more active environment” expected in the second half of the year and Stankey noted the focus is on “owned, operated and controlled footprint” up to 2030, with additional open access opportunities considered selectively.
• Sebastiano Petti, JPMorgan: Inquired about Consumer Wireline seasonality and cable competition. Stankey expects “seasonality…to be different this year” and is pleased with share gains against cable.
• Bryan Kraft, Deutsche Bank: Queried about margin expansion amid industry churn and macro trends. Desroches expects “operating leverage to really be good” and Stankey cited strong “pro-investment policy” tailwinds for the industry.
• Kannan Venkateshwar, Barclays: Asked about the interplay between fiber and fixed wireless. Stankey described them as “complementary” and outlined a strategy of using fixed wireless as a “funneling mechanism” for future fiber customers.

Sentiment Analysis

• Analysts frequently pressed on churn, pricing, and cost-saving sustainability, with a slightly negative to neutral tone, seeking reassurances on margin expansion and competitive positioning.
• Management remained confident and focused, using phrases like “we feel really good about our performance” and “I feel really confident about that,” but acknowledged competitive and macroeconomic headwinds, particularly in churn and operating costs.
• Compared to last quarter, management maintained a similar level of confidence but shifted to more actively addressing competitive churn and cost-saving realization. Analysts’ tone remained probing, with more emphasis on churn and margin sustainability this quarter.

Quarter-over-Quarter Comparison

• Guidance for Mobility service revenue and Consumer Wireline EBITDA was raised, while free cash flow guidance was refined to a range, slightly above the prior outlook.
• Strategic focus shifted to accelerated fiber deployment, with a new target of 60 million fiber locations by 2030 including acquisitions.
• Analysts’ questions this quarter focused more on churn, cost savings from copper retirement, and the competitive environment, compared to last quarter’s emphasis on tariffs and capital allocation.
• Key metrics like postpaid phone net adds and fiber subscriber growth improved, and management’s confidence in the convergence strategy was reinforced by updated penetration rates and financial targets.

Risks and Concerns

• Churn remains elevated due to customers reaching the end of device financing periods and increased competitive activity.
• Management highlighted ongoing cost pressures from growth-related spending and higher equipment costs.
• Potential macroeconomic risks were noted, including tariff-related uncertainty and softness in some public sector business segments.
• Analysts expressed concern over the sustainability of margin expansion, elevated churn, and the pace of cost-saving realization.

Final Takeaway

AT&T’s leadership emphasized strong execution in mobility and broadband, underpinned by accelerated fiber deployment and a reinforced convergence strategy. The company raised key financial and subscriber growth targets, supported by policy tailwinds and capital flexibility, while acknowledging persistent churn and competitive intensity. Management’s messaging remained focused on long-term value creation through strategic investments and disciplined cost management, with an outlook highlighting continued growth, expanded footprint, and shareholder returns.

Read the full Earnings Call Transcript