Differentiated investment-led strategy continues to drive customer growth and advance AT&T’s converged connectivity leadership

DALLAS, Oct. 22, 2025 /PRNewswire/ — AT&T Inc. (NYSE: T) reported strong third-quarter results that demonstrate continued customer demand for its nation-leading wireless and fiber offerings and position the Company to deliver on its full-year consolidated financial outlook.

“We have the key building blocks in place to give our customers the best connectivity experience in the industry and we’re winning the race to lead in convergence,” said John Stankey, AT&T Chairman and CEO. “We continue to add highly-profitable customers that are choosing AT&T for all their connectivity needs on the country’s fastest and largest wireless and fiber networks. It’s clear our differentiated investment-led strategy is working, and we remain on track to achieve all of our 2025 consolidated financial guidance.”

Third-Quarter Consolidated Results

Revenues of $30.7 billion
Diluted EPS of $1.29, which reflects a gain recognized on the sale of the DIRECTV investment, compared to $(0.03) a year ago, which included a non-cash charge
Adjusted EPS* of $0.54, consistent with the year-ago quarter
Operating income of $6.1 billion; adjusted operating income* of $6.6 billion
Net income of $9.7 billion; adjusted EBITDA* of $11.9 billion
Cash from operating activities of $10.2 billion, consistent with the year-ago quarter
Capital expenditures of $4.9 billion; capital investment* of $5.3 billion
Free cash flow* of $4.9 billion versus $4.6 billion a year ago

Third-Quarter Highlights

Strong convergence strategy execution with over 41%
¹ of AT&T Fiber households also choosing AT&T Mobility
405,000 postpaid phone net adds with postpaid phone churn of 0.92%
Mobility service revenues of $16.9 billion, up 2.3% year over year
288,000 AT&T Fiber net adds and 270,000 AT&T Internet Air net adds
Consumer fiber broadband revenues of $2.2 billion, up 16.8% year over year
Repurchased $1.5 billion in common shares; more than $2.4 billion repurchased through the third quarter under the 2024 authorization
Closed the sale of remaining 70% stake in DIRECTV
Announced purchase of low-band and mid-band spectrum from EchoStar for approximately $23 billion – covering virtually every market across the U.S.

Announced Transaction Highlights

The following includes a summary of recently announced transactions and expected financial impacts.

Acquisition of fiber assets from Lumen:

Announced on May 21, 2025, an agreement to acquire substantially all of Lumen’s Mass Markets fiber internet connectivity business for $5.75 billion in cash, subject to purchase price adjustments.
The transaction is now expected to close in early 2026, subject to certain regulatory and other customary closing conditions.
AT&T will hold the acquired fiber network assets, including certain fiber network deployment capabilities, in a new, fully owned subsidiary (“NetworkCo”).
After closing, the Company plans to sell partial ownership of NetworkCo to an equity partner that will co-invest in the ongoing business. AT&T expects to identify an equity partner and close a transaction within approximately 6-12 months of closing the Lumen transaction.
In the 12-24 months following close, the impact of the transaction is expected to be immaterial to adjusted EBITDA*, adjusted EPS* and free cash flow*, and accretive over the long-term.

Acquisition of wireless spectrum licenses from EchoStar:

Announced on August 26, 2025, the acquisition of approximately 30 MHz of nationwide 3.45 GHz mid-band spectrum and approximately 20 MHz of nationwide 600 MHz low-band spectrum for approximately $23 billion in cash, subject to certain adjustments.
The transaction is expected to close in the first half of 2026, subject to certain closing conditions, including regulatory approvals.
AT&T intends to finance the transaction with cash on hand and incremental borrowings.
Following close, AT&T expects its net debt-to-adjusted EBITDA ratio* to increase to the 3.0x range and return to a level consistent with its leverage target in the 2.5x range within approximately three years.
The Company does not expect a material impact to adjusted EPS* and free cash flow* during the first 24 months following close, with accretion to both metrics expected in the third year.

Outlook

AT&T reiterates all full-year 2025 financial guidance:

Consolidated service revenue growth in the low-single-digit range.
- Mobility service revenue growth of 3% or better.
- Consumer fiber broadband revenue growth in the mid-to-high-teens.
Adjusted EBITDA* growth of 3% or better.
- Mobility EBITDA* growth of approximately 3%.
- Business Wireline EBITDA* to decline in the low-double-digit range.
- Consumer Wireline EBITDA* growth in the low-to-mid-teens range.
Capital investment* in the $22 billion to $22.5 billion range.
Free cash flow* in the low-to-mid $16 billion range.
Adjusted EPS* in the higher end of the $1.97 to $2.07 range.
Share repurchases of $4 billion under the 2024 authorization.

AT&T continues to operate the business to achieve the strategy outlined at its 2024 Analyst & Investor Day and updated with its second quarter 2025 earnings release, including $20 billion of capacity for share repurchases during 2025-2027. Accordingly, AT&T reiterates its 2026-2027 financial outlook:

Consolidated service revenue growth in the low-single-digit range annually from 2026-2027.
Adjusted EBITDA* growth of 3% or better annually from 2026-2027.
Adjusted EPS* accelerating to double-digit percentage growth in 2027.
Capital investment* in the $23 billion to $24 billion range annually from 2026-2027.
Free cash flow* of $18 billion+ in 2026 and $19 billion+ in 2027.

The Company expects to maintain a consistent approach to capital returns during 2028-2029 while reducing its net debt-to-adjusted EBITDA ratio*, supported by improved long-term growth in service revenue, adjusted EBITDA* and strong free cash flow* from the Lumen and EchoStar transactions.

Note: AT&T’s third-quarter earnings conference call will be webcast at 8:30 a.m. ET on Wednesday, October 22, 2025. The webcast and related materials, including financial highlights, will be available at investors.att.com.

Consolidated Financial Results

Revenues for the third quarter totaled $30.7 billion versus $30.2 billion in the year-ago quarter, up 1.6%. This was due to higher Mobility, Consumer Wireline and Mexico revenues, partially offset by a decline in Business Wireline.
Operating expenses were $24.6 billion versus $28.1 billion in the year-ago quarter. Operating expenses decreased primarily due to a $4.4 billion non-cash goodwill impairment in the prior-year quarter, lower expenses due to continued transformation initiatives and lower content licensing fees. These decreases were partially offset by increased equipment costs associated with higher wireless equipment revenues, approximately $0.4 billion of apportioned legal settlements, and higher network-related costs. Additionally, depreciation expense increased from continued fiber investment and network upgrades, which were partially offset by lower impacts from the Company’s Open RAN network modernization efforts.
Operating income was $6.1 billion versus $2.1 billion in the year-ago quarter. When adjusting for certain items, adjusted operating income* was $6.6 billion, versus $6.5 billion in the year-ago quarter.
Equity in net income (loss) of affiliates declined $0.3 billion versus the year-ago quarter, reflecting the completed sale of the remaining 70% stake in DIRECTV on July 2.
Net income was $9.7 billion, including a $5.5 billion gain on the sale of the DIRECTV investment, versus $0.1 billion in the year-ago quarter, which included a $4.4 billion non-cash goodwill impairment.
Net income attributable to common stock was $9.3 billion versus $(0.2) billion in the year-ago quarter. Earnings per diluted common share was $1.29 versus $(0.03) in the year-ago quarter. Adjusting for $(0.75), which excludes a gain on the sale of the DIRECTV investment, legal settlement costs, and other items, adjusted earnings per diluted common share* was $0.54, consistent with the year-ago quarter.
Adjusted EBITDA* was $11.9 billion versus $11.6 billion in the year-ago quarter.
Cash from operating activities was $10.2 billion. This was consistent with the year-ago quarter, which included the payment of termination fees associated with network modernization programs. Operational growth and lower cash tax payments in the quarter were more than offset by a voluntary pension plan contribution and lower distributions from DIRECTV.
Capital expenditures were $4.9 billion versus $5.3 billion in the year-ago quarter. Capital investment* totaled $5.3 billion versus $5.5 billion in the year-ago quarter. Cash payments for vendor financing totaled $0.4 billion versus $0.2 billion in the year-ago quarter.
Free cash flow* was $4.9 billion versus $4.6 billion in the year-ago quarter.
Total debt was $139.5 billion at the end of the third quarter, and net debt* was $118.8 billion.

Segment and Business Unit Results

Communications segment revenues were $29.5 billion, up 1.5% year over year, with operating income down 0.8% year over year.

Communications Segment
Dollars in millions	Third Quarter				Percent
Unaudited	2025		2024		Change

Operating Revenues	$ 29,516		$ 29,074		1.5	%
Operating Income	7,096		7,156		(0.8)	%
Operating Income Margin	24.0	%	24.6	%	(60)	BP

Mobility service revenue grew 2.3% year over year driving operating income growth of 1.7% and EBITDA* growth of 2.2%. Postpaid phone net adds were 405,000.

Mobility
Dollars in millions; Subscribers in thousands	Third Quarter				Percent
Unaudited	2025		2024		Change

Operating Revenues	$ 21,713		$ 21,052		3.1	%
Service	16,926		16,539		2.3	%
Equipment	4,787		4,513		6.1	%
Operating Expenses	14,588		14,049		3.8	%
Operating Income	7,125		7,003		1.7	%
Operating Income Margin	32.8	%	33.3	%	(50)	BP
EBITDA*	$ 9,702		$ 9,493		2.2	%
EBITDA Margin*	44.7	%	45.1	%	(40)	BP
EBITDA Service Margin*	57.3	%	57.4	%	(10)	BP
Total Wireless Net Adds²	748		617
Postpaid	328		429
Postpaid Phone	405		403
Postpaid Other	(77)		26
Prepaid Phone	(83)		(45)
Postpaid Churn	1.07	%	0.93	%	14	BP
Postpaid Phone-Only Churn	0.92	%	0.78	%	14	BP
Prepaid Churn	2.82	%	2.73	%	9	BP
Postpaid Phone ARPU	$ 56.64		$ 57.07		(0.8)	%

Mobility revenues were up 3.1% year over year, with service revenue growth of 2.3% and equipment revenue growth of 6.1%, driven by higher wireless device sales volumes. Service revenue growth reflects subscriber gains partially offset by promotional activity and the impact of one-time revenues of $90 million related to administrative fees in the prior-year quarter. Operating expenses were up 3.8% year over year, reflecting increased equipment expense due to higher wireless sales volumes and the sale of higher-priced devices as well as increased advertising and promotional costs and depreciation expense. These increases were partially offset by lower expenses due to continued transformation initiatives and lower content licensing fees. Operating income was $7.1 billion, up 1.7% year over year. EBITDA* was $9.7 billion, up $0.2 billion year over year.

Business Wireline revenues declined year over year driven by continued secular pressures on legacy and other transitional services, which were partially offset by growth in fiber and advanced connectivity services.

Business Wireline
Dollars in millions	Third Quarter				Percent
Unaudited	2025		2024		Change

Operating Revenues	$ 4,248		$ 4,606		(7.8)	%
Operating Expenses	4,602		4,649		(1.0)	%
Operating Income/(Loss)	(354)		(43)		—	%
Operating Income Margin	(8.3)	%	(0.9)	%	(740)	BP
EBITDA*	$ 1,181		$ 1,356		(12.9)	%
EBITDA Margin*	27.8	%	29.4	%	(160)	BP

Business Wireline revenues were down 7.8% year over year due to continued declines in legacy and other transitional services of 17.3%, partially offset by 6.0% growth in fiber and advanced connectivity services. Operating expenses were down 1.0% year over year due to lower personnel and customer support costs associated with ongoing transformation initiatives. These decreases were partially offset by favorable vendor settlements in the prior-year quarter and higher depreciation expense from ongoing strategic investment initiatives, such as fiber and AT&T Internet Air. Operating income was $(354) million versus $(43) million in the year-ago quarter. EBITDA* was $1.2 billion, down $0.2 billion year over year.

Consumer Wireline delivered strong broadband revenue growth driven by a 16.8% increase in fiber revenue. Consumer Wireline also delivered positive broadband net adds for the ninth consecutive quarter, driven by 288,000 AT&T Fiber net adds and 270,000 AT&T Internet Air net adds.

Consumer Wireline
Dollars in millions; Subscribers in thousands	Third Quarter				Percent
Unaudited	2025		2024		Change

Operating Revenues	$ 3,555		$ 3,416		4.1	%
Operating Expenses	3,230		3,220		0.3	%
Operating Income	325		196		65.8	%
Operating Income Margin	9.1	%	5.7	%	340	BP
EBITDA*	$ 1,289		$ 1,120		15.1	%
EBITDA Margin*	36.3	%	32.8	%	350	BP
Broadband Net Adds	232		28
Fiber	288		226
Non Fiber	(56)		(198)
AT&T Internet Air	270		135
Broadband ARPU	$ 71.23		$ 68.25		4.4	%
Fiber ARPU	$ 73.48		$ 70.36		4.4	%

Consumer Wireline revenues were up 4.1% year over year driven by broadband revenue growth of 8.2% due to fiber revenue growth of 16.8%, partially offset by declines in legacy voice and data services and other services. Operating expenses were up 0.3% year over year due to higher depreciation expense driven by fiber investment and higher network-related costs. This was partially offset by lower content licensing fees, and customer support costs. Operating income was $325 million versus $196 million in the year-ago quarter. EBITDA* was $1.3 billion, up $0.2 billion year over year.

Latin America Segment
Dollars in millions; Subscribers in thousands	Third Quarter		Percent
Unaudited	2025	2024	Change

Operating Revenues	$ 1,095	$ 1,022	7.1	%
Service	696	645	7.9	%
Equipment	399	377	5.8	%
Operating Expenses	1,073	1,012	6.0	%
Operating Income	22	10	—	%
EBITDA*	$ 199	$ 168	18.5	%
Total Wireless Net Adds	306	275
Postpaid	243	139
Prepaid	68	187
Reseller	(5)	(51)

Latin America segment revenues were up 7.1% year over year, driven by subscriber and ARPU growth and higher equipment sales as well as the favorable impacts of foreign exchange rates. Operating expenses were up 6.0% due to higher equipment costs, selling costs, and bad debt expense resulting from higher sales, higher depreciation expense, and the unfavorable impacts of foreign exchange rates. Operating income was $22 million compared to $10 million in the year-ago quarter. EBITDA* was $199 million compared to $168 million in the year-ago quarter.

* Further clarification and explanation of non-GAAP measures and reconciliations to the most comparable GAAP measures can be found in the “Non-GAAP Measures and Reconciliations to GAAP Measures” section of the release and at investors.att.com.

Fastest Wireless: RootMetrics® United States RootScore® Report: 1H 2025. Fastest Internet, AT&T Fiber: based on analysis by Ookla® of Speedtest Intelligence® data, 1H 2025. Limited availability. Largest Wireless: Coverage not available everywhere. Based on 3rd party data.

¹AT&T Fiber subscribers with AT&T Mobility is defined as AT&T Fiber subscribers that are also primarily Mobility account holders that subscribe to consumer postpaid phone service. AT&T refers to these customers as converged customers. 3Q25 convergence metrics are presented based on available information and are subject to revision. Convergence rate represents the ratio of converged customers to AT&T Fiber subscribers.

²Excludes migrations between wireless subscriber categories, including connected devices, and acquisition-related activity during the period.

About AT&T
We help more than 100 million U.S. families, friends and neighbors, plus nearly 2.5 million businesses, connect to greater possibility. From the first phone call 140+ years ago to our 5G wireless and multi-gig internet offerings today, we @ATT innovate to improve lives. For more information about AT&T Inc. (NYSE:T), please visit us at about.att.com. Investors can learn more at investors.att.com.

Cautionary Language Concerning Forward-Looking Statements
Information set forth in this news release contains financial estimates and other forward-looking statements that are subject to risks and uncertainties, and actual results might differ materially. A discussion of factors that may affect future results is contained in AT&T’s filings with the Securities and Exchange Commission. AT&T disclaims any obligation to update and revise statements contained in this news release based on new information or otherwise.

Non-GAAP Measures and Reconciliations to GAAP Measures
Schedules and reconciliations of non-GAAP financial measures cited in this document to the most comparable financial measures under generally accepted accounting principles (GAAP) can be found at investors.att.com and in our Form 8-K dated October 22, 2025. Adjusted diluted EPS, adjusted operating income, EBITDA, adjusted EBITDA, free cash flow, and net debt are non-GAAP financial measures frequently used by investors and credit rating agencies. Prior periods for free cash flow and adjusted diluted EPS have been recast to conform to the current period presentation to remove cash flows and equity in net income from our investment in DIRECTV.

Adjusted diluted EPS is calculated by excluding from operating revenues, operating expenses, other income (expenses) and income tax expense, certain significant items that are non-operational or non-recurring in nature, including dispositions and merger integration and transaction costs, actuarial gains and losses, significant abandonments and impairments, benefit-related gains and losses, employee separation and other material gains and losses. Non-operational items arising from asset acquisitions and dispositions include the amortization of intangible assets. While the expense associated with the amortization of certain wireless licenses and customer lists is excluded, the revenue of the acquired companies is reflected in the measure and those assets contribute to revenue generation. We also adjust for net actuarial gains or losses associated with our pension and postemployment benefit plans due to the often-significant impact on our results (we immediately recognize this gain or loss in the income statement, pursuant to our accounting policy for the recognition of actuarial gains and losses). Consequently, our adjusted results reflect an expected return on plan assets rather than the actual return on plan assets, as included in the GAAP measure of income. The tax impact of adjusting items is calculated using the adjusted effective tax rate during the quarter except for adjustments that, given their magnitude, can drive a change in the effective tax rate; in these cases, we use the actual tax expense or combined marginal rate of approximately 25%.

For 3Q25, adjusted EPS of $0.54 is diluted EPS of $1.29 minus $0.79 gain on the sale of the DIRECTV investment plus $0.04 benefit-related, transaction, legal and other items. For 3Q24, adjusted EPS of $0.54 is diluted EPS of $(0.03) adjusted for $0.61 restructuring, minus $0.03 equity in net income of DIRECTV and $0.01 benefit-related, transaction, legal and other items. Transaction, legal and other costs include certain legal reserves and settlements that cover extended historical periods and/or are unpredictable in both magnitude and timing, and therefore are distinct and separate from normal, recurring legal matters. Such costs are presented net of expected insurance recoveries and are primarily associated with legacy legal matters and the expected resolution of certain litigation associated with cyberattacks disclosed in 2024. The third quarter of 2025 also includes approximately $440 million of apportioned property and casualty settlements. The Company expects additional adjustments to 2025 reported diluted EPS to include a non-cash mark-to-market benefit plan gain/loss and other items. The Company expects the mark-to-market adjustment, which is driven by interest rates and investment returns that are not reasonably estimable at this time, to be a significant item. AT&T’s projected adjusted EPS depends on future levels of revenues and expenses, most of which are not reasonably estimable at this time. Accordingly, the Company cannot provide reconciliations between these projected non-GAAP metrics and the most comparable GAAP metrics without unreasonable effort.

Adjusted operating income is operating income adjusted for revenues and costs the Company considers non-operational in nature, including items arising from asset acquisitions or dispositions. For 3Q25, adjusted operating income of $6.6 billion is calculated as operating income of $6.1 billion, plus $435 million of adjustments, which include the transaction, legal, and other operating costs discussed above under Adjusted diluted EPS. For 3Q24, adjusted operating income of $6.5 billion is calculated as operating income of $2.1 billion plus $4.4 billion of adjustments. Adjustments for all periods are detailed in the Discussion and Reconciliation of Non-GAAP Measures included in our Form 8-K dated October 22, 2025.

EBITDA is net income plus income tax, interest, and depreciation and amortization expenses minus equity in net income of affiliates and other income (expense) – net. Adjusted EBITDA is calculated by excluding from EBITDA certain significant items that are non-operational or non-recurring in nature, including dispositions and merger integration and transaction costs, significant abandonments and impairments, benefit-related gains and losses, employee separation, and other material gains and losses.

For 3Q25, adjusted EBITDA of $11.9 billion is calculated as net income of $9.7 billion, plus income tax expense of $1.0 billion, plus interest expense of $1.7 billion, plus equity in net income (loss) of affiliates of $(20) million, minus other income (expense) – net of $6.3 billion, plus depreciation and amortization of $5.3 billion, plus $425 million of adjustments, which include the transaction, legal, and other operating costs discussed above under Adjusted diluted EPS. For 3Q24, adjusted EBITDA of $11.6 billion is calculated as net income of $0.1 billion, plus income tax expense of $1.3 billion, plus interest expense of $1.7 billion, minus equity in net income of affiliates of $0.3 billion, minus other income (expense) – net of $0.7 billion, plus depreciation and amortization of $5.1 billion, plus adjustments of $4.4 billion. Adjustments for all periods are detailed in the Discussion and Reconciliation of Non-GAAP Measures included in our Form 8-K dated October 22, 2025.

At the segment or business unit level, EBITDA is operating income before depreciation and amortization. EBITDA margin is EBITDA divided by total revenues. EBITDA service margin is EBITDA divided by total service revenues.

Adjusted EBITDA, Mobility EBITDA, Business Wireline EBITDA, and Consumer Wireline EBITDA estimates depend on future levels of revenues and expenses which are not reasonably estimable at this time. Accordingly, we cannot provide reconciliations between these projected non-GAAP metrics and the most comparable GAAP metrics without unreasonable effort.

Free cash flow for 3Q25 of $4.9 billion is cash from operating activities of $10.2 billion, minus capital expenditures of $4.9 billion and cash paid for vendor financing of $0.4 billion (there were no cash distributions from DIRECTV classified as operating activities and no cash taxes paid on DIRECTV in 3Q25). For 3Q24, free cash flow of $4.6 billion is cash from operating activities of $10.2 billion, less cash distributions from DIRECTV classified as operating activities of $0.3 billion, less cash taxes paid on DIRECTV of $0.1 billion, minus capital expenditures of $5.3 billion and cash paid for vendor financing of $0.2 billion. Due to high variability and difficulty in predicting items that impact cash from operating activities, capital expenditures, and vendor financing payments, the Company is not able to provide reconciliations between projected free cash flow and the most comparable GAAP metrics without unreasonable effort.

Capital investment provides a comprehensive view of cash used to invest in our networks, product developments, and support systems. In connection with capital improvements, we have favorable payment terms of 120 days or more with certain vendors, referred to as vendor financing, which are excluded from capital expenditures and reported as financing activities. Capital investment includes capital expenditures and cash paid for vendor financing ($0.4 billion in 3Q25, $0.2 billion in 3Q24). Due to high variability and difficulty in predicting items that impact capital expenditures and vendor financing payments, the Company is not able to provide reconciliations between projected capital investment for 2025-2027 and the most comparable GAAP metrics without unreasonable effort.

Net debt of $118.8 billion at September 30, 2025, is calculated as total debt of $139.5 billion less cash and cash equivalents of $20.3 billion and time deposits (i.e. deposits at financial institutions that are greater than 90 days) of $0.4 billion. Net debt estimates depend on future levels of revenues, expenses and other metrics which are not reasonably estimable at this time. Accordingly, we cannot provide a reconciliation between projected net debt-to-adjusted EBITDA and the most comparable GAAP metrics and related ratios without unreasonable effort.

Discussion and Reconciliation of Non-GAAP Measures

We believe the following measures are relevant and useful information to investors as they are part of AT&T’s internal management reporting and planning processes and are important metrics that management uses to evaluate the operating performance of AT&T and its segments. Management also uses these measures as a method of comparing performance with that of many of our competitors. These measures should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with U.S. generally accepted accounting principles (GAAP). Prior periods have been recast to conform to the current period presentation to remove cash flows and equity in net income from our investment in DIRECTV, which we sold to TPG Capital on July 2, 2025.

Free Cash Flow

Free cash flow is defined as cash from operations minus cash flows related to our DIRECTV equity investment (cash distributions minus cash taxes from DIRECTV), minus capital expenditures and cash paid for vendor financing (classified as financing activities). Free cash flow after dividends is defined as cash from operations minus cash flows related to our DIRECTV equity investment, capital expenditures, cash paid for vendor financing and dividends on common and preferred shares. Free cash flow dividend payout ratio is defined as the percentage of dividends paid on common and preferred shares to free cash flow. We believe these metrics provide useful information to our investors because management views free cash flow as an important indicator of how much cash is generated by routine business operations, including capital expenditures and vendor financing, and makes decisions based on it. Management also views free cash flow as a measure of cash available to pay debt and return cash to shareowners.

Free Cash Flow and Free Cash Flow Dividend Payout Ratio
Dollars in millions
	Third Quarter				Nine-Month Period
	2025		2024		2025		2024
Net Cash Provided by Operating Activities	$ 10,152		$ 10,235		$ 28,964		$ 26,875
Less: Distributions from DIRECTV classified as operating activities	—		(281)		(1,926)		(955)
Less: Cash taxes paid on DIRECTV	—		132		251		402
Less: Capital expenditures	(4,887)		(5,302)		(14,061)		(13,420)
Less: Payment of vendor financing	(400)		(180)		(823)		(1,571)
Free Cash Flow	4,865		4,604		12,405		11,331

Less: Dividends paid	(2,033)		(2,038)		(6,168)		(6,171)
Free Cash Flow after Dividends	$ 2,832		$ 2,566		$ 6,237		$ 5,160
Free Cash Flow Dividend Payout Ratio	41.8	%	44.3	%	49.7	%	54.5	%

Cash Paid for Capital Investment

In connection with capital improvements, we negotiate with some of our vendors to obtain favorable payment terms of 120 days or more, referred to as vendor financing, which are excluded from capital expenditures and reported in accordance with GAAP as financing activities. We present an additional view of cash paid for capital investment to provide investors with a comprehensive view of cash used to invest in our networks, product developments and support systems.

Cash Paid for Capital Investment
Dollars in millions
	Third Quarter		Nine-Month Period
	2025	2024	2025	2024
Capital expenditures	$ (4,887)	$ (5,302)	$ (14,061)	$ (13,420)
Payment of vendor financing	(400)	(180)	(823)	(1,571)
Cash paid for Capital Investment	$ (5,287)	$ (5,482)	$ (14,884)	$ (14,991)

EBITDA

Our calculation of EBITDA, as presented, may differ from similarly titled measures reported by other companies. For AT&T, EBITDA excludes other income (expense) – net, and equity in net income (loss) of affiliates, as these do not reflect the operating results of our subscriber base or operations that are not under our control. Equity in net income (loss) of affiliates represents the proportionate share of the net income (loss) of affiliates in which we exercise significant influence, but do not control. Because we do not control these entities, management excludes these results when evaluating the performance of our primary operations. EBITDA also excludes interest expense and the provision for income taxes. Excluding these items eliminates the expenses associated with our capital and tax structures. Finally, EBITDA excludes depreciation and amortization in order to eliminate the impact of capital investments. EBITDA does not give effect to cash used for debt service requirements and thus does not reflect available funds for distributions, reinvestment or other discretionary uses. EBITDA is not presented as an alternative measure of operating results or cash flows from operations, as determined in accordance with GAAP.

EBITDA service margin is calculated as EBITDA divided by service revenues.

These measures are used by management as a gauge of our success in acquiring, retaining and servicing subscribers because we believe these measures reflect AT&T’s ability to generate and grow subscriber revenues while providing a high level of customer service in a cost-effective manner. Management also uses these measures as a method of comparing cash generation potential with that of many of its competitors. The financial and operating metrics which affect EBITDA include the key revenue and expense drivers for which management is responsible and upon which we evaluate performance.

We believe EBITDA Service Margin (EBITDA as a percentage of service revenues) to be a more relevant measure than EBITDA Margin (EBITDA as a percentage of total revenue) for our Mobility business unit operating margin. We also use wireless service revenues to calculate margin to facilitate comparison, both internally and externally with our wireless competitors, as they calculate their margins using wireless service revenues as well.

There are material limitations to using these non-GAAP financial measures. EBITDA, EBITDA margin and EBITDA service margin, as we have defined them, may not be comparable to similarly titled measures reported by other companies. Furthermore, these performance measures do not take into account certain significant items, including depreciation and amortization, interest expense, tax expense and equity in net income (loss) of affiliates. For market comparability, management analyzes performance measures that are similar in nature to EBITDA as we present it, and considering the economic effect of the excluded expense items independently as well as in connection with its analysis of net income as calculated in accordance with GAAP. EBITDA, EBITDA margin and EBITDA service margin should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP.

EBITDA and Adjusted EBITDA
Dollars in millions
	Third Quarter		Nine-Month Period
	2025	2024	2025	2024
Net Income	$ 9,677	$ 145	$ 19,230	$ 7,845
Additions:
Income Tax Expense	976	1,285	3,512	3,545
Interest Expense	1,700	1,675	5,013	5,098
Equity in Net (Income) Loss of Affiliates	20	(272)	(1,905)	(915)
Other (Income) Expense – Net	(6,254)	(717)	(7,476)	(1,850)
Depreciation and amortization	5,317	5,087	15,758	15,206
EBITDA	11,436	7,203	34,132	28,929
Transaction, legal and other costs	487	34	615	101
Benefit-related (gain) loss	(62)	(73)	(126)	(122)
Asset impairments and abandonments and restructuring	—	4,422	504	5,061
Adjusted EBITDA¹	$ 11,861	$ 11,586	$ 35,125	$ 33,969
¹ See “Adjusting Items” section for additional discussion and reconciliation of adjusted items.

Segment and Business Unit EBITDA, EBITDA Margin and EBITDA Service Margin
Dollars in millions
	Third Quarter				Nine-Month Period
	2025		2024		2025		2024
Communications Segment
Operating Income	$ 7,096		$ 7,156		$ 21,152		$ 20,906
Add: Depreciation and amortization	5,076		4,813		15,084		14,319
EBITDA	$ 12,172		$ 11,969		$ 36,236		$ 35,225

Total Operating Revenues	$ 29,516		$ 29,074		$ 88,775		$ 86,513
Operating Income Margin	24.0	%	24.6	%	23.8	%	24.2	%
EBITDA Margin	41.2	%	41.2	%	40.8	%	40.7	%

Mobility
Operating Income	$ 7,125		$ 7,003		$ 20,796		$ 20,190
Add: Depreciation and amortization	2,577		2,490		7,659		7,453
EBITDA	$ 9,702		$ 9,493		$ 28,455		$ 27,643

Total Operating Revenues	$ 21,713		$ 21,052		$ 65,128		$ 62,126
Service Revenues	16,926		16,539		50,430		48,810
Operating Income Margin	32.8	%	33.3	%	31.9	%	32.5	%
EBITDA Margin	44.7	%	45.1	%	43.7	%	44.5	%
EBITDA Service Margin	57.3	%	57.4	%	56.4	%	56.6	%

Business Wireline
Operating Income (Loss)	$ (354)		$ (43)		$ (653)		$ 123
Add: Depreciation and amortization	1,535		1,399		4,554		4,147
EBITDA	$ 1,181		$ 1,356		$ 3,901		$ 4,270

Total Operating Revenues	$ 4,248		$ 4,606		$ 13,029		$ 14,274
Operating Income Margin	(8.3)	%	(0.9)	%	(5.0)	%	0.9	%
EBITDA Margin	27.8	%	29.4	%	29.9	%	29.9	%

Consumer Wireline
Operating Income	$ 325		$ 196		$ 1,009		$ 593
Add: Depreciation and amortization	964		924		2,871		2,719
EBITDA	$ 1,289		$ 1,120		$ 3,880		$ 3,312

Total Operating Revenues	$ 3,555		$ 3,416		$ 10,618		$ 10,113
Operating Income Margin	9.1	%	5.7	%	9.5	%	5.9	%
EBITDA Margin	36.3	%	32.8	%	36.5	%	32.7	%

Latin America Segment
Operating Income	$ 22		$ 10		$ 111		$ 19
Add: Depreciation and amortization	177		158		482		507
EBITDA	$ 199		$ 168		$ 593		$ 526

Total Operating Revenues	$ 1,095		$ 1,022		$ 3,120		$ 3,188
Operating Income Margin	2.0	%	1.0	%	3.6	%	0.6	%
EBITDA Margin	18.2	%	16.4	%	19.0	%	16.5	%

Adjusting Items

Adjusting items include revenues and costs we consider non-operational in nature, including items arising from asset acquisitions or dispositions, including the amortization of intangible assets. While the expense associated with the amortization of certain wireless licenses and customer lists is excluded, the revenue of the acquired companies is reflected in the measure and that those assets contribute to revenue generation. We also adjust for net actuarial gains or losses associated with our pension and postemployment benefit plans due to the often-significant impact on our results (we immediately recognize this gain or loss in the income statement, pursuant to our accounting policy for the recognition of actuarial gains and losses). Consequently, our adjusted results reflect an expected return on plan assets rather than the actual return on plan assets, as included in the GAAP measure of income.

The tax impact of adjusting items is calculated using the adjusted effective tax rate during the quarter except for adjustments that, given their magnitude, can drive a change in the effective tax rate, in these cases we use the actual tax expense or combined marginal rate of approximately 25%.

Adjusting Items
Dollars in millions
	Third Quarter		Nine-Month Period
	2025	2024	2025	2024
Operating Expenses
Transaction, legal and other costs¹	$ 487	$ 34	$ 615	$ 101
Benefit-related (gain) loss	(62)	(73)	(126)	(122)
Asset impairments and abandonments and restructuring	—	4,422	504	5,061
Adjustments to Operations and Support Expenses	425	4,383	993	5,040
Amortization of intangible assets	10	13	28	43
Adjustments to Operating Expenses	435	4,396	1,021	5,083
Other
Equity in net income of DIRECTV	—	(281)	(1,926)	(955)
Gain on sale of DIRECTV	(5,479)	—	(5,479)	—
Benefit-related (gain) loss, impairments of investments and other	(99)	(92)	(224)	146
Adjustments to Income Before Income Taxes	(5,143)	4,023	(6,608)	4,274
Tax impact of adjustments	67	(88)	(266)	(31)
Tax-related items	177	—	177	—
Adjustments to Net Income	$ (5,387)	$ 4,111	$ (6,519)	$ 4,305
Preferred stock redemption gain	—	—	(90)	—
Adjustments to Net Income Attributable to Common Stock	$ (5,387)	$ 4,111	$ (6,609)	$ 4,305
¹ Includes certain legal reserves and settlements that cover extended historical periods and/or are unpredictable in both magnitude and timing, and therefore are distinct and separate from normal, recurring legal matters. Such costs are presented net of expected insurance recoveries and are primarily associated with legacy legal matters and the expected resolution of certain litigation associated with cyberattacks disclosed in 2024. The third quarter of 2025 also includes approximately $440 of apportioned property and casualty settlements.

Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBITDA service margin and Adjusted diluted EPS are non-GAAP financial measures calculated by excluding from operating revenues, operating expenses, other income (expense) and income tax expense, certain significant items that are non-operational or non-recurring in nature, including dispositions and merger integration and transaction costs, actuarial gains and losses, significant abandonments and impairments, benefit-related gains and losses, employee separation and other material gains and losses. Management believes that these measures provide relevant and useful information to investors and other users of our financial data in evaluating the effectiveness of our operations and underlying business trends.

Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBITDA service margin and Adjusted diluted EPS should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP. AT&T’s calculation of Adjusted items, as presented, may differ from similarly titled measures reported by other companies.

Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted EBITDA and Adjusted EBITDA Margin
Dollars in millions
	Third Quarter		Nine-Month Period
	2025	2024	2025	2024
Operating Income	$ 6,119	$ 2,116	$ 18,374	$ 13,723
Adjustments to Operating Expenses	435	4,396	1,021	5,083
Adjusted Operating Income	$ 6,554	$ 6,512	$ 19,395	$ 18,806

EBITDA	$ 11,436	$ 7,203	$ 34,132	$ 28,929
Adjustments to Operations and Support Expenses	425	4,383	993	5,040
Adjusted EBITDA	$ 11,861	$ 11,586	$ 35,125	$ 33,969

Total Operating Revenues	$ 30,709	$ 30,213	$ 92,182	$ 90,038

Operating Income Margin	19.9 %	7.0 %	19.9 %	15.2 %
Adjusted Operating Income Margin	21.3 %	21.6 %	21.0 %	20.9 %
Adjusted EBITDA Margin	38.6 %	38.3 %	38.1 %	37.7 %

Adjusted Diluted EPS
	Third Quarter		Nine-Month Period
	2025	2024	2025	2024
Diluted Earnings Per Share (EPS)	$ 1.29	$ (0.03)	$ 2.51	$ 0.93
Gain on sale of DIRECTV	(0.79)	—	(0.79)	—
Equity in net income of DIRECTV	—	(0.03)	(0.21)	(0.10)
Restructuring and impairments	—	0.61	0.05	0.72
Benefit-related, transaction, legal and other items	0.04	(0.01)	0.04	(0.02)
Adjusted EPS	$ 0.54	$ 0.54	$ 1.60	$ 1.53
Year-over-year growth – Adjusted	— %		4.6 %
Weighted Average Common Shares Outstanding with Dilution (000,000)	7,169	7,208	7,203	7,200

Net Debt to Adjusted EBITDA

Net Debt to EBITDA ratios are non-GAAP financial measures frequently used by investors and credit rating agencies and management believes these measures provide relevant and useful information to investors and other users of our financial data. Our Net Debt to Adjusted EBITDA ratio is calculated by dividing the Net Debt by the sum of the most recent four quarters Adjusted EBITDA. Net Debt is calculated by subtracting cash and cash equivalents and deposits at financial institutions that are greater than 90 days (e.g., certificates of deposit and time deposits), from the sum of debt maturing within one year and long-term debt.

Net Debt to Adjusted EBITDA – 2025
Dollars in millions
	Three Months Ended
	Dec. 31,	March 31,	June 30,	Sep. 30,	Four Quarters
	2024¹	2025¹	2025¹	2025	Four Quarters
Adjusted EBITDA	$ 10,791	$ 11,533	$ 11,731	$ 11,861	$ 45,916
End-of-period current debt					11,378
End-of-period long-term debt					128,090
Total End-of-Period Debt					139,468
Less: Cash and Cash Equivalents					20,272
Less: Time Deposits					350
Net Debt Balance					118,846
Annualized Net Debt to Adjusted EBITDA Ratio					2.59
¹ As reported in AT&T’s Form 8-K filed July 23, 2025.

Net Debt to Adjusted EBITDA – 2024
Dollars in millions
	Three Months Ended
	Dec. 31,	March 31,	June 30,	Sep. 30,	Four Quarters
	2023¹	2024¹	2024¹	2024¹	Four Quarters
Adjusted EBITDA	$ 10,555	$ 11,046	$ 11,337	$ 11,586	$ 44,524
End-of-period current debt					2,637
End-of-period long-term debt					126,375
Total End-of-Period Debt					129,012
Less: Cash and Cash Equivalents					2,586
Less: Time Deposits					650
Net Debt Balance					125,776
Annualized Net Debt to Adjusted EBITDA Ratio					2.82
¹ As reported in AT&T’s Form 8-K filed July 23, 2025.

Supplemental Operational Measures

As a supplemental presentation to our Communications segment operating results, we are providing a view of our AT&T Business Solutions results which includes both wireless and fixed operations. This combined view presents a complete profile of the entire business customer relationship and underscores the importance of mobile solutions to serving our business customers. Our supplemental presentation of business solutions operations is calculated by combining our Mobility and Business Wireline operating units, and then adjusting to remove non-business operations. The following table presents a reconciliation of our supplemental Business Solutions results. Prior period amounts have been conformed to the current period’s presentation.

Supplemental Operational Measures
	Third Quarter
	September 30, 2025				September 30, 2024
	Mobility	Business Wireline	Adj.¹	Business Solutions	Mobility	Business Wireline	Adj.¹	Business Solutions	Percent Change
Operating Revenues
Wireless service	$ 16,926	$ —	$ (14,425)	$ 2,501	$ 16,539	$ —	$ (14,056)	$ 2,483	0.7	%
Legacy and other transitional services	—	2,208	—	2,208	—	2,669	—	2,669	(17.3)	%
Fiber and advanced connectivity services	—	1,853	—	1,853	—	1,748	—	1,748	6.0	%
Wireless equipment	4,787	—	(3,995)	792	4,513	—	(3,735)	778	1.8	%
Wireline equipment	—	187	—	187	—	189	—	189	(1.1)	%
Total Operating Revenues	21,713	4,248	(18,420)	7,541	21,052	4,606	(17,791)	7,867	(4.1)	%

Operating Expenses
Operations and support	12,011	3,067	(9,791)	5,287	11,559	3,250	(9,453)	5,356	(1.3)	%
EBITDA	9,702	1,181	(8,629)	2,254	9,493	1,356	(8,338)	2,511	(10.2)	%
Depreciation and amortization	2,577	1,535	(2,105)	2,007	2,490	1,399	(2,036)	1,853	8.3	%
Total Operating Expenses	14,588	4,602	(11,896)	7,294	14,049	4,649	(11,489)	7,209	1.2	%
Operating Income (Loss)	$ 7,125	$ (354)	$ (6,524)	$ 247	$ 7,003	$ (43)	$ (6,302)	$ 658	(62.5)	%

Operating Income Margin				3.3 %				8.4 %	(510)	BP
¹ Non-business wireless reported in the Communications segment under the Mobility business unit.

Supplemental Operational Measures
	Nine-Month Period
	September 30, 2025				September 30, 2024
	Mobility	Business Wireline	Adj.¹	Business Solutions	Mobility	Business Wireline	Adj.¹	Business Solutions	Percent Change
Operating Revenues
Wireless service	$ 50,430	$ —	$ (43,017)	$ 7,413	$ 48,810	$ —	$ (41,473)	$ 7,337	1.0	%
Legacy and other transitional services	—	7,032	—	7,032	—	8,505	—	8,505	(17.3)	%
Fiber and advanced connectivity services	—	5,426	—	5,426	—	5,183	—	5,183	4.7	%
Wireless equipment	14,698	—	(12,299)	2,399	13,316	—	(11,028)	2,288	4.9	%
Wireline equipment	—	571	—	571	—	586	—	586	(2.6)	%
Total Operating Revenues	65,128	13,029	(55,316)	22,841	62,126	14,274	(52,501)	23,899	(4.4)	%

Operating Expenses
Operations and support	36,673	9,128	(29,969)	15,832	34,483	10,004	(28,180)	16,307	(2.9)	%
EBITDA	28,455	3,901	(25,347)	7,009	27,643	4,270	(24,321)	7,592	(7.7)	%
Depreciation and amortization	7,659	4,554	(6,265)	5,948	7,453	4,147	(6,094)	5,506	8.0	%
Total Operating Expenses	44,332	13,682	(36,234)	21,780	41,936	14,151	(34,274)	21,813	(0.2)	%
Operating Income	$ 20,796	$ (653)	$ (19,082)	$ 1,061	$ 20,190	$ 123	$ (18,227)	$ 2,086	(49.1)	%

Operating Income Margin				4.6 %				8.7 %	(410)	BP
¹ Non-business wireless reported in the Communications segment under the Mobility business unit.