AT&T Inc. (NYSE:T) announced financial results for its fiscal third quarter of 2025 on Wednesday.
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The telecom giant reported operating revenues of $30.71 billion, representing a 1.6% increase compared to the same period last year, which fell short of the analyst consensus estimate of $30.87 billion.
Adjusted earnings per share (EPS) stood at $0.54, in line with the analyst consensus estimate.
The results were primarily driven by higher revenues from Mobility, Consumer Wireline, and Mexico, partially offset by a decline in Business Wireline.
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AT&T attracted more wireless subscribers than analysts anticipated in the third quarter, fueled by bundled offers and aggressive promotions tied to the new Apple Inc. (NASDAQ:AAPL) iPhone launch, CNBC reports Wednesday.
The September-ending quarter is a key period for U.S. wireless providers, as competition intensifies around Apple's annual iPhone release.
To capture new customers and prompt upgrades to higher-tier plans, AT&T rolled out attractive iPhone 17 promotions and encouraged subscriptions to multiple services by offering discounts on combined wireless and fiber broadband packages.
Over 41% of fiber households also added mobile plans. AT&T reported 405,000 postpaid phone net additions, an increase from 403,000 in the prior year.
AT&T's postpaid phone churn, a measure of customer attrition, increased to 0.92% from 0.78% the previous year, while prepaid churn rose to 2.82% from 2.73%. Despite this, the postpaid phone-only Average Revenue Per User (ARPU) declined by 0.8% year-over-year to $56.64.
In its Consumer Wireline segment, AT&T continued to expand its fiber optic footprint, adding 288,000 AT&T Fiber net subscribers and 270,000 AT&T Internet Air net additions.
Financial Highlights
Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) increased to $11.9 billion from $11.6 billion in the year-ago quarter. The company's net income rose to $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).
Operating cash flow reached $10.15 billion compared to $10.24 billion in the same quarter last year, contributing to a free cash flow of $4.87 billion, up from $4.60 billion. Capital expenditures for the quarter were $4.89 billion.
Looking at segment performance, the Mobility segment's operating income grew 1.7% year-over-year to $7.13 billion, maintaining a margin of 32.8%, down from 33.3% a year ago.
The Consumer Wireline segment showed significant improvement, with its operating margin expanding to 9.1% from 5.7%.
Conversely, the Business Wireline segment reported an operating margin loss of (8.3)%, a decline from a (0.9)% margin in the previous year.
Overall, the company's operating income was $6.1 billion, compared to $2.1 billion in the same quarter last year.
Outlook
AT&T reiterated its full-year 2025 financial outlook, anticipating consolidated service revenue growth in the low-single-digit range. The company reaffirmed its outlook for a 3% or more increase in Mobility service revenue.
The company maintained a Consumer fiber broadband revenue growth outlook of mid-teens, and adjusted EPS of $1.97-$2.07, aligning with the analyst consensus estimate of $2.06.
The company reaffirmed its long-term financial targets, including a low-single-digit annual growth rate for consolidated service revenue in 2026 and 2027, an adjusted EBITDA growth outlook of at least 3% annually over the same period, and adjusted EPS double-digit growth by 2027.
AT&T maintained annual capital investments of $23 billion-$24 billion from 2026 to 2027 and free cash flow of above $18 billion in 2026 and over $19 billion in 2027.
Price Action: AT&T shares were up 0.92% at $26.29 during premarket trading on Wednesday, according to Benzinga Pro data.
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