Q1 boost: AT&T stays resilient amid competitive market

Overview

AT&T reported a solid first quarter for 2025, with continued growth in Mobility and Fiber segments driving improved revenue and strong cash generation. The company reiterated its full-year financial and operational guidance and announced plans to begin share repurchases in Q2 2025.

Chairman and CEO John Stankey emphasized: “Our business fundamentals remain strong, and we are uniquely positioned to win in this dynamic and competitive market. We are growing the right way as customers continue to choose AT&T Fiber and 5G wireless for connectivity they can rely on, guaranteed or we’ll make it right.”

Q1 2025 vs. Q1 2024:

Revenues increased slightly to $30.6bn (+2% YoY), driven by higher Mobility and Consumer Wireline revenues, partially offset by declines in Business Wireline and Latin America, impacted by FX headwinds.
- Communications segment revenues were $29.6bn (+2.4% YoY), with operating income up 3.6% YoY.
- Mobility revenues were up to $21.57bn (+4.7% YoY), driven by service revenue growth of 4.1% from postpaid phone average revenue per subscriber (ARPU) growth and subscriber gains, as well as equipment revenue growth of 6.9% from higher wireless device sales volumes.
- Business Wireline revenues were down to $4.47bn (-9.1% YoY), due to declines in legacy and other transitional services of 17.4%, partially offset by growth in fiber and advanced connectivity services of 4.5%.
- Consumer Wireline revenues were up to $3.52bn (+5.1% YoY), driven by broadband revenue growth of 9.6% due to fiber revenue growth of 19.0%, partially offset by declines in legacy voice and data services and other services.
- Latin America segment revenues were down to $971m (-8.7% YoY), primarily due to unfavorable impacts of foreign exchange rates, partially offset by higher equipment sales, and subscriber and ARPU growth.
GAAP net income rose to $4.7bn (+24% YoY), benefiting from higher operating income and larger equity gains from the DIRECTV investment.
Adjusted EPS was $0.51 (vs. $0.48 in Q1 2024), reflecting operational growth and improved profitability.
Operating income recorded a value of $5.8bn (flat YoY), while adjusted operating income was $6.4bn (+6.7% YoY), supported by growth in high-margin Mobility and Fiber services.
Operating expenses were $24.9bn (+3% YoY), primarily due to higher equipment costs associated with higher wireless equipment revenues and higher restructuring costs.
Adjusted EBITDA increased to $11.5bn (+5% YoY), primarily driven by higher service revenues and operating efficiencies.
Cash from operations was $9.0bn (vs. $7.5bn in Q1 2024), aided by dividend receipts from DIRECTV and strong service cash flows.
Free cash flow also grew to $3.1bn (+11% YoY), boosted by operational improvements and lower vendor financing payments.
Capital expenditures were $4.3bn (vs. $3.8 bn in Q1 2024), while capital investment totaled $4.5bn (vs. $4.6 billion in Q1 2024).
Total debt was $126.2bn at the end of the first quarter, while net debt was $119.1bn.
The company plans to commence share repurchases in Q2 2025, based on deleveraging progress and strong cash generation.

AT&T reaffirmed its full-year 2025 guidance, expecting consolidated service revenue to grow at a low single-digit rate, with Mobility service revenue projected to reach the high end of the 2% to 3% growth range. Consumer Fiber broadband revenue is anticipated to grow at a mid-teens rate, supported by strong adoption trends. Adjusted EBITDA is forecasted to grow by 3% or better, while adjusted EPS is expected to range between $1.97 and $2.07. The company also maintains its free cash flow target of at least $16bn for the year. Additionally, AT&T remains on track to close the sale of its remaining 70% stake in DIRECTV by mid-2025, enhancing its strategic flexibility and shareholder value.

The publication of quarterly results this week did not bring such significant movements on the market, with the price of T shares ending this trading week with a slight depreciation of approximately -1%. However, since the beginning of this year, the stock price of the company’s shares has experienced a significant increase, by approximately +18%, successfully coping even with the extremely high volatility this month, which appeared with the imposition of trade tariffs at a global level. In addition, the company’s market price remains around the 50-day moving average, practically maintaining its upward trend of the last year.