AT&T Inc. (NYSE: T), a global telecommunications giant, reported strong second-quarter 2025 results, demonstrating its ability to grow “the right way” by attracting high-quality 5G and fiber subscribers, while increasing service revenues, which led to improved consolidated revenues and earnings growth. The company continues to solidify its position in a competitive marketplace, driven by leading wireless and fiber networks and a focus on converged connectivity services.

Financial Highlights: Revenue, Earnings, and Cash Flow Growth

In the second quarter of 2025, AT&T recorded revenues of $30.8 billion, a 3.5% increase versus $29.8 billion in the year-ago quarter. This increase was due to higher Mobility and Consumer Wireline revenues, partially offset by declines in Business Wireline and Mexico, which included unfavorable foreign exchange impacts.

The company’s net income totaled $4.9 billion, compared to $3.9 billion in the year-ago quarter. Diluted EPS was $0.62, versus $0.49 a year ago. Adjusted EPS stood at $0.54, compared to $0.51 a year ago. Operating income reached $6.5 billion, versus $5.8 billion in the year-ago quarter. Operating expenses were $24.3 billion, versus $24.0 billion in the year-ago quarter, an increase primarily due to higher equipment costs associated with higher wireless equipment revenues, and higher network-related costs. These expenses were partially offset by expense declines from restructuring costs in the year-ago quarter and continued transformation efforts.

Mobility service revenues increased by 3.5% year-over-year to $16.9 billion. Consumer fiber broadband revenues surged by 18.9% year-over-year to $2.1 billion. Cash from operating activities amounted to $9.8 billion, versus $9.1 billion a year ago. Free cash flow was $4.4 billion, versus $4.0 billion a year ago.

Subscriber Growth and Strategic Initiatives

AT&T continued to demonstrate strong subscriber growth, with 401,000 postpaid phone net adds, and postpaid phone churn of 0.87%. In broadband, there were 243,000 AT&T Fiber net adds and 203,000 AT&T Internet Air net adds. The company also repurchased approximately $1.0 billion in common shares. On July 2, AT&T closed the sale of its entire remaining 70% stake in DIRECTV to TPG.

Tax Savings and Future Focus

AT&T expects to realize $6.5 billion to $8.0 billion of cash tax savings during 2025-2027 due to tax provisions in the “One Big Beautiful Bill Act,” relative to the guidance it provided at its 2024 Analyst & Investor Day. This saving reflects estimated savings of $1.5 billion to $2.0 billion in 2025, and $2.5 billion to $3.0 billion in each of 2026 and 2027.

The company intends to invest $3.5 billion of these savings into its network to accelerate its fiber internet build-out to a pace of 4 million locations per year, a run-rate it expects to achieve by the end of 2026. As a result, AT&T expects that by the end of 2030 it will reach approximately 50 million customer locations with its in-region fiber network and more than 60 million fiber locations when including the Lumen Mass Markets fiber assets it has agreed to acquire and plans to expand, its Gigapower joint venture, and agreements with other commercial open access providers. Additionally, AT&T intends to contribute $1.5 billion of these savings to its employee pension plan by the end of 2026, which would result in approximately 95% funding of the plan. The remaining tax savings will add to AT&T’s financial flexibility to support additional strategic investments, incremental capital returns, and debt repayment, among other potential uses.

Updated Outlook for 2025-2027

AT&T updated certain elements of its financial guidance for 2025-2027 to reflect the impact of expected cash tax savings, as well as its year-to-date operating performance and outlook for the remainder of 2025. For the full year 2025, AT&T expects consolidated service revenue growth in the low-single-digit range, Mobility service revenue growth of 3% or better, and consumer fiber broadband revenue growth in the mid-to-high teens. The company also anticipates adjusted EBITDA growth of 3% or better, capital investment in the $22 billion to $22.5 billion range, free cash flow in the low-to-mid $16 billion range, including over half of the planned pension funding through 2026, and adjusted EPS of $1.97 to $2.07. Share repurchases for 2025 are expected to be $4 billion, including approximately $1.3 billion completed year to date.

The company reiterates its long-term financial outlook for 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, and adjusted EPS accelerating to double-digit percentage growth in 2027. As a result of the cash tax savings from provisions in the “One Big Beautiful Bill Act,” AT&T updates its financial outlook for capital investment in the $23 billion to $24 billion range annually from 2026-2027, and expects free cash flow of $18 billion+ in 2026 and $19 billion+ in 2027.

Summary: AT&T – Focus on Connectivity, Innovation, and Financial Flexibility

AT&T delivered a strong second quarter, indicating its ability to grow while focusing on a high-quality customer base and 5G and fiber optic services. The consolidated financial results, including increased revenues, net income, and free cash flow, alongside significant tax savings, provide the company with financial flexibility to invest in its network, employee pension plan, and continue returning capital to shareholders. The planned investments in fiber optic network expansion and the positive momentum in core segments position AT&T as a company with potential for continued growth and value creation, despite challenges in the competitive environment. The information in this article is provided for professional review purposes only and does not constitute investment advice.