AT&T posts strong Q2 as fiber and wireless growth lifts cash
AT&T raised its shareholder return targets after strong second-quarter subscriber growth demonstrated successful execution of its connectivity bundling strategy.
AT&T shares rose 4% after the US telecom giant reported second-quarter results that exceeded expectations across subscriber additions and cash generation. Revenue reached $31.6 billion, a 2.3% increase from the same period last year, while income from continuing operations climbed 3.6% to $5 billion.
The operational metrics provided the clearest evidence yet that heavy infrastructure spending is translating into commercial momentum. The company added over 1 million advanced connectivity customers during the quarter, pushing service revenue for the segment up 5.1% to $23.5 billion.
Fiber expansion drove much of this growth, with the network reaching an additional 1 million locations to total 38.6 million. AT&T secured 367,000 new fiber internet customers alongside 279,000 fixed wireless additions. On the mobile side, postpaid phone net additions hit 432,000, with churn remaining low at 0.86%.
Investors are closely watching telecoms for proof that merging wireline and wireless offerings can boost retention and average revenue. AT&T reported that 42.5% of households taking its advanced home internet also subscribe to its wireless service, a critical metric for its strategy.
The subscriber gains flowed directly to the bottom line. Free cash flow improved to $4.7 billion from $4.4 billion a year earlier, while adjusted EBITDA rose 5.2% to $12.3 billion. "The accelerated growth we delivered this quarter shows our structural advantages to lead the next era of connectivity," said John Stankey, AT&T chairman and CEO.
AT&T capitalised on this liquidity by returning $4.1 billion to shareholders in the quarter, including $2.2 billion in share buybacks. Looking ahead, the company maintained its guidance for higher adjusted EBITDA, adjusted earnings per share, and free cash flow through 2028.
It also reiterated plans to return more than $45 billion to shareholders between 2026 and 2028. Furthermore, AT&T expects its net debt-to-adjusted EBITDA ratio to return to a target of around 2.5 times roughly three years after closing its EchoStar transaction.
