AT&T Expands Profit as Connectivity Growth Accelerates
Free cash flow rebounded to $4.7 billion, nearly doubling from the first quarter.
AT&T (T), the telecommunications company, increased second-quarter operating income 8.3% as faster growth in its Advanced Connectivity business offset continued declines in legacy services. Advanced Connectivity operating income rose 20.3%, and its margin expanded 350 basis points to 25.7%.
The quarter extended a steady rise in profitability even as top-line momentum eased. Adjusted EBITDA increased to $12.3 billion from $11.8 billion in the first quarter and $11.2 billion in the fourth quarter of 2024.
Revenue rose 2.3% from a year earlier to $31.6 billion, slowing from the first quarter’s 2.9% growth and remaining roughly flat sequentially. Adjusted earnings increased to $0.65 a share from $0.54 a year earlier and $0.57 in the first quarter. GAAP earnings from continuing operations rose to $0.66 a share from $0.62.
Advanced Connectivity service revenue grew 5.1% to $23.5 billion, accelerating from 3.6% growth in the prior quarter. The business added a record 646,000 internet subscribers, including 367,000 fiber customers, while postpaid phone net additions climbed to 432,000 and churn improved to 0.86%.
Advanced Home Internet revenue increased 27.3% to $2.93 billion, including revenue from the Lumen fiber acquisition. Wireless service revenue grew 3.3%, and business fiber and advanced-connectivity revenue rose 10.0%. Legacy revenue fell 25.9%, driving a 45.5% decline in that unit’s operating income and EBITDA.
Cash from continuing operations increased to $10.8 billion from $7.6 billion in the first quarter, supporting the recovery in free cash flow. Capital investment rose to $6.1 billion from $5.1 billion sequentially and a year earlier. AT&T also recorded a $286 million impairment, abandonment and restructuring charge that included costs tied to reprioritizing its spectrum strategy.
AT&T maintained its 2026 outlook for adjusted earnings of $2.25 to $2.35 a share, adjusted EBITDA growth of 3% to 4% and free cash flow of at least $18 billion. The company accelerated its planned 2026 share repurchases to approximately $10 billion, increasing capital returns while leaving its operating targets unchanged.