AT&T kicked off earnings season with a cleaner beat and a clearer roadmap. For the fourth quarter of 2025, the carrier delivered revenue of $33.5 billion and adjusted EPS of $0.52, ahead of consensus, as disciplined wireless execution and another strong fiber quarter offset legacy declines. Shares moved higher in early trading on January 28, 2026, as management paired the beat with a sturdier multiyear free-cash-flow path and a more “converged” reporting frame.
The print: steadier growth, better mix
- Revenue: $33.5B (+y/y), above ~$32.9B Street. Adjusted EPS: $0.52 vs. ~$0.46 expected. Free cash flow (FCF):$4.2B in Q4. Capex: $6.8B.
- Mobility: 421k postpaid phone net adds; postpaid phone churn 0.98%; mobility service revenue up 2.4% y/y to $17.0B.
- Fiber & fixed wireless: 283k AT&T Fiber net adds and 221k Internet Air net adds; consumer fiber revenue $2.2B (+13.6% y/y).
- Convergence: 42% of AT&T Fiber households also take AT&T wireless (up again), a key cross-sell lever.
Guidance and long-term framework
Management sees 2026 adjusted EPS at $2.25–$2.35, with FCF climbing above $18B in 2026 and targeting $21B+ by 2028 as fiber scales, subscriber mix improves, and capex normalizes. The company plans $45B+ of capital returns across 2026–2028, including buybacks beginning in 2026 alongside the dividend.
AT&T is also recasting segments into three buckets—Advanced Connectivity (5G & fiber), Legacy, and Latin America—to better reflect the core growth engines and isolate the runoff in copper. Expect historical periods to be recast.
Strategy check: fiber flywheel + spectrum scale
The thesis here is disciplined scale: keep loading high-quality wireless subscribers while pushing fiber deeper into the footprint, then let convergence raise lifetime value (lower churn, higher ARPU, more lines per home). That showed up again: fiber momentum, sub-1% phone churn, and a growing share of households taking both products. Management is doubling down via network assets—highlighting spectrum and fiber expansions—to protect unit economics even as promotions ebb and flow.
What could move the stock next
- Sustainability of net adds and churn. Adds were solid but just shy of some forecasts; the sub-1% churn was the more important signal for profitability. Watch competitive intensity around upcoming device cycles.
- FCF delivery versus promises. With FCF seasonally back-loaded, quarterly cadence (working capital, capex phasing) will be scrutinized against the $18B+ 2026 target.
- Fiber build pacing and ARPU. Another ~0.3M fiber adds quarter helps, but mix/price discipline matters as the build moves beyond early, denser passes.
- Capital returns. The plan to return $45B+ over 2026–2028, including 2026 buybacks, adds a second leg to the dividend story—execution here will frame multiple expansion.
- Segment recast. New disclosure should clarify growth vs. runoff and may sharpen multiples if investors ascribe premium to Advanced Connectivity.
Valuation snapshot (intraday, Jan 28, 2026)
Shares traded in the mid-$23s after the release, up on the day. The dividend policy remains intact, with management positioning FCF growth to fund both payouts and buybacks beginning this year.
Bottom line
This was the kind of quarter AT&T needed: a clean beat, sticky churn, and a credible cash ramp. If the company hits its 2026–2028 FCF path while keeping fiber growth and wireless churn in gear, the equity case can broaden beyond yield to include real buyback-powered EPS growth. Execution on convergence—and proof that legacy runoff won’t swamp the cash story—remains the gating factor.
FAQ
What exactly did AT&T beat?
Revenue ($33.5B vs. ~$32.9B expected) and adjusted EPS ($0.52 vs. ~$0.46). FCF of $4.2B was also ahead of typical expectations.
How strong were subscriber trends?
Postpaid phone adds were 421k with 0.98% churn—healthy retention. Fiber net adds were 283k and Internet Air 221k.
What is the new 2026 outlook?
Adjusted EPS $2.25–$2.35, FCF >$18B in 2026, stepping to $21B+ by 2028.
Are there changes to how AT&T will report?
Yes—three segments: Advanced Connectivity, Legacy, and Latin America, with prior periods recast.
How is capital returned to shareholders?
Dividend plus $45B+ total returns planned over 2026–2028, including buybacks starting in 2026.
Disclaimer
This article is for informational purposes only and does not constitute investment advice, an offer, or a solicitation to buy or sell any security. Financial figures and guidance referenced are those disclosed by the company and contemporary market reports as of January 28, 2026; they may be updated or revised by the company. Always do your own research and consider consulting a qualified financial advisor before making investment decisions.
