AT&T builds on operational success with promising 2025 outlook

Overview

On an extremely complicated day for the American stock market, the reports continued and AT&T delivered important fourth-quarter and full-year results for 2024, highlighting significant momentum in expanding its 5G and fiber subscriber base. The company successfully met its financial and operational guidance for the year and reaffirmed its outlook for 2025.

CEO John Stankey emphasized that these results are a testament to years of consistent execution, positioning AT&T for a new era of growth as it continues to modernize its wireless network, expand its fiber infrastructure, and return value to shareholders through share repurchases starting in the second half of 2025.

Q4 2024 vs. Q4 2023:

• Revenues for Q4 totaled $32.3bn (+0.9% vs. 2023), due to higher Mobility service and equipment revenues and Consumer Wireline revenues, partially offset by declines in Business Wireline and Mexico.
• Operating income was $5.3bn (+1% YoY), consistent with the year-ago quarter.
• Cash from operating activities was $11.9bn (+4% YoY), reflecting higher cash distributions from DIRECTV.
• Net income experienced remarkable growth to a value of $4.4bn (+69% YoY).
• Adjusted EBITDA grew quite slightly to a value of $10.8bn (+2% vs. 2023).
• Earnings per diluted common share (EPS) rose to $0.56 vs. $0.30 in the Q4 2023, driven by improved revenue performance and disciplined cost management.
• Free cash flow was $4.8 billion (-25% vs. 2023), as the company continued to drive a more ratable quarterly free cash flow cadence.
• Capital investments experienced significant growth in Q4, reaching $7.1bn (+26% vs. 2023)

Full-Year 2024 highlights:

• Revenues for the full year totaled $122.3bn (-0.1% YoY), primarily driven by lower revenues from Business Wireline service revenue and Mobility equipment revenue, offset by higher Mobility service and Consumer Wireline, and Mexico revenues.
• Operating income was on a downward trend, down to a value of $19bn (-19% vs. 2023), as well as net income, which also reached a lower value than the previous year, of $12.3bn (-19% YoY).
• Cash from operating activities was $38.8bn (+1.3% vs. YoY), reflecting working capital timing and operational improvements, partially offset by higher cash tax payments.
• Adjusted EPS also decreased slightly, to a value of $2.26 (-6% vs. 2023).
• However, adjusted EBITDA increased slightly, to $44.8bn (+3% YoY).
• Postpaid phone growth achieved 1.7m net adds for the year with an industry-leading churn rate of 0.76%.
• For the fiber net adds, the company has 1.0m net additions, marking the seventh consecutive year of achieving this milestone.

For 2025 outlook, AT&T projects revenue growth in the low single digits, with Mobility service revenue anticipated to grow at the higher end of 2–3%. Adjusted EBITDA is expected to grow by 3% or more, driven by operational efficiency and revenue expansion. The company forecasts free cash flow to exceed $16bn, excluding DIRECTV contributions, while planning capital investments of $22bn to continue expanding its 5G and fiber networks and modernizing its infrastructure.

Even though the major US markets were in a fairly strong downtrend on January 27th, after the emergence of a new Chinese AI model recently launched by the company DeepSeek, AT&T shares had a good trading day, with a price increase of approximately 6%.

Author: Ionuț-Adrian Lazar