AT&T INC.

AT&T Inc. is a holding company whose subsidiaries and affiliates operate worldwide in the telecommunications and technology industries. The company is a leading provider of telecommunications and technology services globally, with services and products that vary by market and utilize various technology platforms in a range of geographies. The company's reportable segments are organized as Communications and Latin America. The Communications segment provides wireless and wireline telecom and broadband services to consumers located in the United States and businesses globally, while the Latin America segment provides wireless service and equipment in Mexico. The company is a leader in providing connectivity services through its market focus areas of 5G and fiber, and its integrated telecommunications network utilizes different technological platforms to provide instant connectivity at higher speeds made possible by fiber network expansion and wireless network enhancements.

AT&T faces substantial competition in its wireless businesses from two national wireless providers, a larger number of regional providers and resellers, and certain cable companies. In Mexico, the company is one of three facilities-based providers, with the most significant market share controlled by América Móvil. In most U.S. markets, the company competes for broadband and legacy voice and data customers with large cable companies, wireless broadband providers, and other smaller telecommunications companies. The company's competitive advantages include its solid spectrum portfolio strengthened through FCC auctions and other spectrum acquisitions, its fiber foundation, and its integrated fixed wireline and mobile approach, which management believes will differentiate its services and provide additional convergence growth opportunities.

AT&T generates revenue through a mix of service and equipment income. Service revenues include wireless service, fiber and advanced connectivity services, legacy and other transitional services, broadband service, and legacy voice and data services. Equipment revenues come from the sale of handsets, wireless data cards, wireless computing devices, and customer premises equipment. The company serves consumers and businesses globally, with primary customer segments including postpaid, prepaid, and reseller wireless subscribers, as well as residential and business broadband customers. The company's business strategies reflect integrated product offerings that cut across product lines and utilize shared assets.

The Communications segment, which provided approximately 97% of 2025 segment operating revenues, contains three business units: Mobility, Business Wireline, and Consumer Wireline. Mobility provides nationwide wireless service and equipment, serving 120 million Mobility subscribers as of December 31, 2025, including 91 million postpaid (74 million phone), 18 million prepaid, and 11 million through resellers. Mobility revenue includes service and equipment categories, with service revenue of $67.384 billion ¹ in 2025 and equipment revenue of $22.098 billion ². Business Wireline provides advanced ethernet-based fiber services, fixed wireless services, IP Voice and managed professional services, as well as legacy voice and data services, with total operating revenues of $17.231 billion ³ in 2025. Consumer Wireline provides broadband services including fiber connections and AT&T Internet Air (AIA), with total operating revenues of $14.183 billion ⁴ in 2025, and had 10.4 million fiber consumer wireline broadband customers ⁵ and 1.5 million AIA connections ⁶ at December 31, 2025.

The Latin America segment provides wireless service and equipment in Mexico, accounting for approximately 3% of 2025 segment operating revenues. The segment served approximately 24.7 million subscribers ⁷ under the AT&T and Unefon brands as of December 31, 2025. Latin America segment operating revenues were $4.379 billion ⁸ in 2025, with service revenue of $2.715 billion ⁹ and equipment revenue of $1.664 billion ¹⁰. The segment's operating income was $145 million ¹¹ in 2025, compared to an operating loss of $141 million ¹² in 2023.

In July 2025, AT&T sold its remaining interest in DIRECTV to TPG, recording a gain of approximately $5.6 billion ¹³ on the sale. On May 21, 2025, the company agreed to acquire substantially all of Lumen's Mass Markets fiber business for $5.75 billion ¹⁴ in cash, which was completed on February 2, 2026. On August 25, 2025, the company agreed to purchase FCC licenses in the 600 MHz and 3.45 GHz bands from EchoStar for approximately $23 billion ¹⁵, expected to close in early 2026. The company also completed the acquisition of select spectrum licenses from United States Cellular Corporation on January 13, 2026, with a cash payment of $1.018 billion ¹⁶.

For the fiscal year 2025, AT&T reported total operating revenues of $125.648 billion ¹⁷, compared to $122.336 billion ¹⁸ in 2024 and $122.428 billion ¹⁹ in 2023. Net income attributable to common stock was $21.889 billion ²⁰ in 2025, compared to $10.746 billion ²¹ in 2024 and $14.192 billion ²² in 2023. Diluted earnings per share attributable to common stock was $3.04 ²³ in 2025, compared to $1.49 ²⁴ in 2024 and $1.97 ²⁵ in 2023. Operating income was $24.162 billion ²⁶ in 2025, compared to $19.049 billion ²⁷ in 2024 and $23.461 billion ²⁸ in 2023. Cash provided by operating activities was $40.284 billion ²⁹ in 2025, compared to $38.771 billion ³⁰ in 2024.

However, the company stated that it expects revenue growth in its wireless and broadband businesses as customers demand instant connectivity and higher speeds made possible by wireless network enhancements through 5G deployment and fiber network expansion. The company also expects that an increasing portion of its revenues will come from converged customers with seamless connectivity.

A key growth vector is the continued deployment of 5G and fiber networks. The company expects to continue to deliver revenue growth in the coming years from wireless and IP-based fiber broadband services. As of December 31, 2025, the company's network covers more than 322 million people with 5G technology in the United States and North America ³¹. The company plans to continue expanding its fiber footprint and growing customers, having added 1.1 million fiber broadband customers during 2025 ³². Another growth vector is the expansion of AT&T Internet Air (AIA) services, with 875,000 AIA connections added during 2025 ³³. The company also plans to accelerate connectivity growth through the pending acquisition of substantially all of Lumen's Mass Markets fiber business, which at the time of signing covered approximately one million fiber customers and included fiber network assets that reached more than four million fiber locations ³⁴.

Another growth vector is the deployment of Open RAN to build a more robust ecosystem of network infrastructure providers and suppliers, which management expects will foster lower network costs and improved operational efficiencies. The company also plans to continue deploying low- and mid-band spectrum to improve speed and capacity, including spectrum to be acquired from pending transactions with EchoStar Corporation and other spectrum acquisitions. The company's concentration is to aggregate the most traffic on the largest, lowest marginal cost, converged network through efficient spectrum deployment and construction of the largest high-capacity broadband solutions in the United States.

Management expects expense trends consistent with the prior year during 2026, with continued focus on efficiency led by the cost transformation initiative. The company expects the spending required to support growth and efficiency initiatives, primarily continued deployment of fiber and 5G, to pressure expense trends in 2026. The company is restructuring businesses, working with regulators and customers to sunset legacy networks, improving customer service and ordering functions through digital transformation, sizing support costs and staffing with current activity levels, and reassessing overall benefit costs. The company also expects cost savings through AI-driven efficiencies in network design and operations, software development, sales, marketing, customer support services and general and administrative costs.

The company expects that its capital investment, which includes capital expenditures and cash paid for vendor financing, will be in the $23 billion to $24 billion range ³⁵ in 2026. Capital expenditures in 2025 were $20.842 billion ³⁶, and when including $1.181 billion ³⁷ cash paid for vendor financing, capital investment was $22.023 billion ³⁸. The company plans to voluntarily contribute approximately $350 million ³⁹ to its pension plans in 2026 and expects only minimal ERISA contribution requirements. The company's dividend policy considers the expectations and requirements of stockholders, capital funding requirements of AT&T and long-term growth opportunities. In January 2026, the Board of Directors approved an authorization to repurchase an additional $10 billion ⁴⁰ of common stock.

The company faces headwinds from ongoing pressure on pricing during 2026 as it responds to the geopolitical and macroeconomic environment and its competitive marketplace, especially in wireless services. The company expects that legacy Business Wireline products will continue to decline, and it plans to offset these declines by growing connectivity with small to mid-sized businesses. The company also faces risks from adverse changes in global financial markets that could limit its ability and its larger customers' and suppliers' ability to access capital or increase the cost of capital needed to fund business operations. Additionally, the company's international operations increase its exposure to political instability, changes in the international economy, and regulation on its business.

The company faces constraints from the need to deploy significant amounts of capital and require ongoing access to spectrum in order to provide attractive services to customers. The company has spent, and plans to continue spending, significant capital and other resources on the ongoing development and deployment of its 5G and fiber networks. This deployment and other network service enhancements and product launches may not occur as scheduled or at the cost expected due to many factors, including unexpected inflation, delays in determining equipment and wireless handset operating standards, supplier delays, software issues, increases in network and handset component costs, regulatory permitting delays for tower sites or enhancements, or labor-related delays. The company also faces constraints from increasing competition, which could materially adversely affect its operating results.

The company faces material risks from increasing competition in wireless and broadband services, which could put pressure on pricing and margins. The company's ability to compete depends on continued improvement in network quality and customer service, and a sustained decline in a reporting unit's revenues and earnings has resulted in the past, and may again result in the future, in a significant negative impact on its fair value, requiring an impairment charge. The company also faces risks from cyberattacks, which have caused and may in the future cause equipment or network failures, copying or loss of information, including sensitive personal information of customers or employees, as well as disruptions to operations. In July 2024, the company disclosed a cybersecurity incident relating to the copying of mobile customer call data. The company's debt level at December 31, 2025 was $136.100 billion ⁴¹, and increases in debt levels to fund spectrum purchases or other strategic decisions could adversely affect its ability to finance future debt at attractive rates. The company also faces risks from adverse changes in global financial markets that could limit its ability to access capital or increase the cost of capital needed to fund business operations. Additionally, the company is subject to risks from changes in federal, state and foreign government regulations, including the FCC's reclassification of broadband internet access services as telecommunications services, which could increase operating costs.

Management's message emphasizes a focus on the core capabilities of the company's products, infrastructure, and network during 2026. Key strategic priorities include accelerating fiber expansion, both organically and through the pending acquisition of substantially all of Lumen's Mass Markets fiber business, and continuing to deploy low- and mid-band spectrum to improve speed and capacity, including spectrum to be acquired from pending transactions with EchoStar Corporation. Management also emphasizes continuing to drive efficiencies and a competitive advantage through cost transformation initiatives, including modernization of IT infrastructure and product simplification. The company's concentration is to aggregate the most traffic on the largest, lowest marginal cost, converged network through efficient spectrum deployment and construction of the largest high-capacity broadband solutions in the United States, while also working with regulators and customers to decommission high-cost legacy technologies over the next several years.