Earnings Call Insights: AT&T Inc. (T) Q3 2025
Management View
- John Stankey, CEO & Chairman, stated, “I’m pleased to report that we had another solid quarter and remain on track to achieve this year’s consolidated financial guidance.” He highlighted over 400,000 postpaid phone net adds and over 550,000 new subscribers to AT&T Fiber and Internet Air, resulting in the highest total broadband net adds in more than eight years. Stankey announced, “We passed more than 31 million total locations with fiber, and we expect to reach more than 60 million customer locations by the end of 2030.” He also noted that more than 41% of AT&T fiber households now choose AT&T for wireless, reinforcing the company’s focus on converged customer relationships.
- Stankey discussed planned acquisitions of spectrum licenses from EchoStar and fiber assets from Lumen as moves to “significantly enhance and expand our advanced connectivity portfolio.” He added, “We started deploying the 3.45 gigahertz spectrum… covering nearly 2/3 of the U.S. population by mid-November.”
- Pascal Desroches, Senior EVP & CFO, reported, “At a consolidated level, total revenues grew 1.6% year-over-year. Adjusted EBITDA grew 2.4% and we expanded adjusted EBITDA margins by 30 basis points. Adjusted EPS was $0.54 in the quarter, consistent with the prior year.”
- Desroches further stated, “Third quarter free cash flow was $4.9 billion versus $4.6 billion a year ago. Capital investment was $5.3 billion, which was down $200 million year-over-year.”
Outlook
- Desroches reiterated guidance for full year mobility service revenue growth of 3% or better and mobility EBITDA growth of approximately 3%. He added, “We continue to expect to achieve full year growth in consumer fiber broadband revenue in the mid- to high teens and Consumer Wireline EBITDA growth in the low to mid-teens range.”
- Guidance for full year consolidated service revenue growth is in the low single-digit range, with adjusted EBITDA growth of 3% or better. Full year free cash flow is expected in the low to mid $16 billion range and full year capital investment in the $22 billion to $22.5 billion range.
- Desroches said, “We also reiterate our full year outlook for adjusted EPS of $1.97 to $2.07 and expect that we will come in closer to the high end of this range.”
- An updated long-term financial outlook will be provided early next year following the closing of the Lumen and EchoStar transactions.
Financial Results
- AT&T delivered 405,000 postpaid phone net adds, with postpaid phone churn at 0.92% and postpaid phone ARPU at $56.64.
- Desroches noted, “Mobility service revenue grew by 2.3% year-over-year,” and “Consumer Wireline total revenues grew 4.1% year-over-year, driven by 16.8% growth in fiber revenue. Consumer Wireline EBITDA grew more than 15% for the quarter.”
- The company added 288,000 AT&T fiber customers and 270,000 AT&T Internet Air net adds in the third quarter.
- During the quarter, $3.5 billion was returned to shareholders, including nearly $1.5 billion in stock repurchases. Net debt to adjusted EBITDA stood at 2.59x at quarter-end.
- AT&T closed the sale of its remaining stake in DIRECTV, receiving approximately $320 million in cash, with an additional $3.8 billion expected primarily in the fourth quarter and early next year.
Q&A
- Peter Supino, Wolfe Research, LLC, asked about competition in fiber expansion and the transition from DSL. John Stankey responded that AT&T is “deliberate about ensuring that everybody knows when the train rolls into town… it’s probably not a good place for anybody else to come and deploy their capital.” He described the DSL base as being actively managed and replaced with fixed wireless where fiber is not being built.
- Benjamin Swinburne, Morgan Stanley, inquired about market segmentation between fiber and fixed wireless, and business strategy for SMBs. Stankey explained AT&T’s shift to broad “Internet from AT&T” messaging and emphasized targeted digital marketing to optimize offers by geography. Pascal Desroches added, “We continue to expect overall company margin expansion consistent with what you saw this quarter… We are working through several transformations, all of which will continue to drive overall efficiency.”
- John Hodulik, UBS, questioned positioning amid higher promotional activity and ARPU trends. Stankey cited a focus on converged customers and described ARPU pressure as a “feature, not a bug,” linked to strategic expansion into underpenetrated segments. Desroches clarified, “We are trying to maximize service revenue.”
- David Barden, New Street Research LLP, raised the topic of future M&A activity. Stankey replied, “We have all the assets in front of us… our job now is to organically invest in this business and make it a better company.”
- Michael Ng, Goldman Sachs, asked about confidence in accretion from pending acquisitions. Stankey stated, “We continue to get data points to support that we have very conservative modeling and our approach to these things,” and noted operational progress with Gigapower and the EchoStar spectrum.
Sentiment Analysis
- Analysts focused on competitive threats, market segmentation, and long-term strategy, with a tone that was neutral to slightly positive, driven by strong broadband results and interest in future growth levers.
- Management maintained a confident and assertive tone, repeatedly emphasizing strong execution, strategic clarity, and resilience to competitive pressures. Phrases such as “I wouldn’t trade our assets and position for anyone else’s” and “we continue to deliver value for our customers and our shareholders” reinforced this.
- Compared to the previous quarter, management’s tone remained confident but was more explicit in outlining the convergence strategy and the company’s readiness to execute organically, while analysts continued to probe on competition and ARPU trends.
Quarter-over-Quarter Comparison
- Guidance for mobility and wireline revenue and EBITDA growth remained consistent, but management now expects to hit the high end of its EPS guidance range.
- Strategic focus shifted more directly to convergence and organic growth, with less emphasis on external M&A.
- Analysts’ questions continued to focus on competitive dynamics and ARPU, but there was greater attention to the operational execution of strategic initiatives such as spectrum deployment and the Lumen transaction.
- Management’s confidence level increased regarding the returns on recent and pending investments, with more detailed discussion of operational progress in broadband and spectrum utilization.
Risks and Concerns
- Management acknowledged continued elevated marketplace switching activity and higher costs to acquire and retain subscribers, but pointed to operational efficiencies and targeted offers as mitigating factors.
- Concerns were raised about ARPU pressure due to expansion into lower-ARPU segments, but management framed this as part of a deliberate growth strategy tied to convergence.
- Analysts raised questions about competitive threats from new entrants and overbuilders, as well as the risks associated with achieving penetration targets via open access and wholesale partners.
- Stankey addressed potential risks from LEO satellite technology, characterizing it as complementary rather than a direct threat.
Final Takeaway
AT&T’s third quarter 2025 results showcased continued momentum in broadband net additions and reinforced the company’s strategy of driving convergence between fiber and wireless services. Management reiterated its confidence in achieving full-year guidance and projected reaching more than 60 million fiber locations by 2030. The company emphasized operational execution, disciplined capital allocation, and the integration of pending acquisitions as key drivers of long-term growth and value creation.