AT&T (NYSE:T) reported third-quarter results marked by continued subscriber growth across wireless, fiber and fixed wireless services, while raising its full-year adjusted earnings outlook and outlining plans to reduce capital spending in 2027 and 2028.
Chairman and CEO John Stankey said the company added more than 1 million Advanced Connectivity subscribers across fiber, fixed wireless and postpaid phone services during the quarter, its best quarterly result in more than four years. It was also the second consecutive quarter in which AT&T exceeded 1 million net additions across those categories.
“Our improved gains in subscribers and converged accounts are driving strong financial results,” Stankey said. The company added about 350,000 converged customer relationships during the quarter, referring to accounts that use both AT&T wireless and home internet services. Nearly 43% of AT&T’s advanced home internet customers also had a postpaid wireless account at the end of the quarter.
Revenue, Earnings and Cash Flow
Total revenue increased 5.3% from a year earlier, while service revenue rose 3.8%, Chief Financial Officer Pascal Desroches said. Adjusted EBITDA increased 5.4% year over year, producing an adjusted EBITDA margin of 38.7%, which Desroches said was AT&T’s highest third-quarter margin since the company refocused its operations on advanced connectivity.
Adjusted earnings per share rose 20% to $0.65 from $0.54 a year earlier, driven primarily by EBITDA growth and lower depreciation expense. The quarter included a $2.6 billion non-cash impairment charge connected with the planned sale of AT&T Mexico and an approximately $800 million employee separation charge that is expected to affect cash primarily in 2027.
- Capital investment totaled $5.6 billion, up about $300 million from a year earlier.
- Free cash flow was approximately $5 billion, roughly unchanged from the third quarter of 2025.
- AT&T expects approximately $6 billion in fourth-quarter free cash flow.
- The company maintained its full-year free-cash-flow outlook of more than $18 billion and capital-investment outlook of $23 billion to $24 billion.
AT&T now expects full-year adjusted EPS of about $2.40, above its previous forecast of $2.25 to $2.35. The company cited lower depreciation expense associated with held-for-sale accounting for its Mexico business. It also maintained its forecast for low-single-digit consolidated service-revenue growth and increased its adjusted EBITDA outlook to the upper end of its prior 3% to 4% growth range.
Advanced Connectivity Growth
Advanced Connectivity service revenue increased 6.1% from a year earlier and EBITDA for the segment rose 7.3%. Wireless service revenue climbed 5%, supported by subscriber growth and a 4% increase in postpaid phone average revenue per user, or ARPU.
AT&T added 379,000 postpaid phone subscribers in the quarter, while postpaid phone churn remained unchanged from a year earlier at 0.92%.
Advanced home internet service revenue grew more than 23%. The company added 696,000 advanced home internet subscribers, including 416,000 AT&T Fiber net additions and 280,000 Internet Air net additions. Desroches described the performance as a record for combined fiber and fixed-wireless additions.
Fiber ARPU declined 4% year over year, reflecting introductory pricing, discounts for converged accounts and a growing number of lower-ARPU Quantum-branded fiber customers in former Lumen territories. AT&T expects a similar year-over-year decline in the fourth quarter, though management said its focus remains on total service revenue, EBITDA and profitable customer growth rather than any single operating metric.
Business Advanced Connectivity service revenue rose 2.5%, with fiber and advanced connectivity revenue growing nearly 9%. Stankey said AT&T is seeing improved business sales execution and stronger demand for fiber and fixed wireless services.
Fiber Expansion, AI Connectivity and Legacy Network Retirement
Stankey said AT&T’s network is positioned to serve rising connectivity needs associated with artificial intelligence. More than 90% of mapped U.S. data centers are within 10 miles of AT&T fiber, and more than 80% are within one mile, he said. AT&T is working with AWS and Microsoft on high-capacity connectivity requirements.
The company reiterated its goal of reaching more than 60 million fiber locations by the end of the decade. It recently announced a joint venture involving Gigapower, Global Infrastructure Partners, CPP Investments and fiber assets acquired from Lumen to support deployment outside AT&T’s traditional operating territory. AT&T also signed a multiyear supply agreement with Corning.
Desroches said AT&T expects to meet its 60 million-plus fiber-location goal with annual capital investment roughly $1 billion below previous plans. Capital investment is now expected to be $22 billion to $23 billion annually in 2027 and 2028. Some of those savings will be redirected toward working capital supporting customer acquisition and higher interest payments.
AT&T also continues to retire copper-based legacy services. Stankey said more than 100 wire centers no longer support customers using legacy services. The company remains on track to discontinue copper-based services in 50% of wire centers outside California by the end of 2027 and in substantially all such wire centers by the end of 2029.
Legacy service revenue declined about 25% during the quarter, while legacy EBITDA fell about 27%. AT&T continues to target $4 billion in annual consolidated cost savings by the end of 2028.
Debt, Capital Returns and CFO Transition
Net debt to adjusted EBITDA ended the quarter at 3.13 times, compared with 2.68 times in the second quarter, largely reflecting AT&T’s $23 billion purchase of spectrum licenses from EchoStar. The company expects the ratio to return to its target range of about 2.5 times during 2029 through EBITDA growth, debt repayment and expected proceeds from its fiber joint venture and the sale of the Mexico wireless business.
AT&T returned $4.8 billion to shareholders in the quarter, including $2.8 billion in share repurchases. Through the first nine months of 2026, it repurchased more than $7 billion of stock and continues to target about $10 billion in share repurchases for the full year.
Desroches said the call would be his final quarterly earnings report as CFO. Jennifer Biry, AT&T’s deputy CFO, is expected to assume the CFO role after the new year.
About AT&T (NYSE:T)
AT&T Inc (NYSE: T) is a telecommunications company that provides wireless communications, broadband, and related connectivity services. Its offerings include mobile voice and data plans, internet access, fiber broadband, fixed wireless services, and business communications solutions.
The company serves consumers, businesses, government agencies, and other organizations primarily in the United States. AT&T’s business operations include wireless network services, wireline connectivity, fiber-optic internet, voice services, and networking solutions designed to connect locations, devices, and applications.
AT&T traces its history to the Bell System and has operated under its current corporate name since 2005, following the acquisition of AT&T Corp.
