Overview
AT&T
T · NYSEQ3 2026Telecommunications · Wireless and Fiber
Since the Report − 4.3%
Revenue grew 5.3% year over year, EPS beat the estimate by 8.3%; the stock fell 6.5% in its first reaction.
- RevenueQ3
- $32.32B
- Estimate $31.69B · 2.0% Beat
- EPSAdjusted
- $0.65
- Estimate $0.60 · 8.3% Beat
Verdict
BUYAT&T beat expectations on revenue and earnings and raised its 2026 profit guidance. Even so, the stock fell 6.5%; postpaid phone net adds came in soft, churn rose and SpaceX's entry into wireless dominated the call. The next thing to watch is whether postpaid phone churn falls back below 0.90%.
Close on Report DayOct 21
$21.91▼ 6.5%Report-Day Move
- Market Cap(Today)
- ≈ $141 B
- 1Y Return(At Report)
- − 16%
- P/E(At Today's Price · $2.39 · Trailing 12M)
- 8.8
- PEG(Company Guidance 2026)
- 0.66
- Net Margin(Trailing 12M)
- 10.2%
Earnings Summary
In 30 Seconds- Revenue of $32.32 billion beat estimates by 2.0%, and adjusted EPS of $0.65 beat by 8.3%.
- 2026 EPS guidance was raised to the $2.40 range; a record 769,000 internet subscribers were added.
- The stock fell 6.5% on slowing phone net adds and worries about SpaceX.
The Numbers
Internet Net Adds
769K
Record · Fiber 442K
Postpaid Phone Net Adds
379K
Churn 0.92% · Q2 0.86%
Free Cash Flow
$5.0B
▲ 2% YoY
Stock Reaction
▼ 6.5%
Close to Close · Oct 21
Quarterly Revenue ($ Billion)
30.70
Q3 25 · $30.7 B
33.47
Q4 25 · $33.5 B · QoQ + 9.0%
31.50
Q1 26 · $31.5 B · QoQ − 5.9%
31.60
Q2 26 · $31.6 B · QoQ + 0.3%
32.32
Q3 26 · $32.3 B · QoQ + 2.3% · YoY + 5.3%
- Q3 25
- Q4 25
- Q1 26
- Q2 26
- Q3 26
Q4 2026 Company Guidance
- 2026 Adjusted EPS2.4 $
~2.40 · Prior 2.25–2.35 · Estimate 2.342.6% Above Estimate ▲
- 2026 Free Cash Flow18 billion
18+ · 2027 19+ · 2028 21+
- 2026 Capital Investment23 – 24 billion23 billion24 billion23 – 24 billion
2027-28 22–23 a Year · Prior 23–24
- Adjusted EBITDA Growth3% – 4%3%4%
Upper End of Range · 2028 5%+
- Adv. Connectivity Service Rev.5%
5%+ Growth · 2026
How to Read the Chart
The blue band is the company's low-high range; its length shows how much room the company left itself. The black triangle and the line beneath it mark where the market expected, and the notch in the band is the range's midpoint. The triangle appears only where a market expectation is known. When the company gave a single number rather than a range and no market expectation is known, that row gets no band at all: there is no length to measure and no position to compare. Axis is ±16% around the midpoint.
Segment and KPI Data
Revenue by Segment
- Advanced Connectivity$29.5 BShare 91.5%▲ 7.2% YoY
Wireless, fiber and fixed wireless
- Legacy$1.50 BShare 4.7%▼ 24.5% YoY
- Latin America$1.24 BShare 3.8%▲ 13.2% YoY
Key Metrics
Postpaid Phone Net Adds
379 K subscribers
Press Release
Fiber Net Adds
442 K subscribers
Press Release
Fixed Wireless Net Adds
327 K subscribers
Press Release
Postpaid Phone Churn
0.9%
Press Release
Free Cash Flow
$5.00 B
▲ 2.0% YoYPress Release
Capital Investment
$5.60 B
Press Release
Shares are computed over the segment total: $32.2 B. Source: Press Release.
Metrics come only from the company's own filings; each one names the document it was taken from.
“We are growing valuable customer relationships as more homes and businesses choose AT&T for all their advanced connectivity needs across both internet and on-the-go wireless. Our asset base positions us well for the AI era, with a leading position in fiber – the best technology available.”
- SpaceX Competition
- Fiber ARPU Pressure
- Leverage After EchoStar
Summary and Review
Summary
AT&T reported third-quarter revenue of $32.32 billion. That is up 5.3% year over year. Revenue beat the $31.69 billion market expectation by 2.0%; because the gap sits at the 2% threshold, that gate is in line. Adjusted EPS was $0.65, 8.3% above the estimate. The earnings gate is open. The company raised 2026 adjusted EPS guidance from $2.25-2.35 to the $2.40 range. That is 2.6% above the $2.34 estimate, so the guidance gate is open too.
Even so, the stock fell sharply. The stock closed at $21.91, down 6.5% close to close. The market read this report not as a profit story but as a competition story. Postpaid phone net adds were 379,000 and churn rose to 0.92%. SpaceX's entry into wireless was the central question on the call. Leverage also rose to 3.13x after the EchoStar spectrum purchase. Verizon and T-Mobile each fell about 3% during the session.
Score 71, verdict buy. The quarter's numbers are strong: a record 769,000 internet subscribers were added and adjusted EBITDA rose 5.4%. Guidance was raised and free cash flow targets through 2028 were maintained. But the score sits at the low end of its band. Slowing phone net adds, a 4% drop in fiber ARPU and high leverage are all caveats. The stock's 15.8% decline over the past year prices in part of these concerns. One gate is in line and two are open.
Full Review
Earnings and guidance beat expectations.
Adjusted EPS rose from $0.54 to $0.65. That is up 20.4% year over year. Adjusted EBITDA rose 5.4% to $12.5 billion. The company said 2026 EBITDA growth will land at the upper end of its 3-4% range. It targets growth above 5% in 2028. Reported EPS fell from $1.29 to $0.13. Last year's figure included a gain on the DIRECTV sale. This year, a $2.6 billion non-cash impairment on the Mexico business cost 41 cents per share. Employee separation charges added another 9 cents. The company agreed on October 13 to sell its wireless business in Mexico. These items are one-time and do not change the direction of the business. Latin America revenue still rose 13.2% to $1.24 billion.
Fiber and fixed wireless set a record.
The company added 442,000 fiber and 327,000 fixed wireless subscribers in the quarter. The total of 769,000 internet net adds is a company record. Advanced home internet revenue rose 23.4% to $3.0 billion. The fiber network now reaches more than 39 million locations. The purchase of Lumen's fiber business closed on February 2. Its network assets are being transferred to a joint venture with GIP and CPP Investments. On the earnings call, however, fiber ARPU was said to be down 4% year over year. A similar decline is expected in the fourth quarter. So revenue per subscriber is falling even as the subscriber count grows fast. Price-led promotions are paying for volume growth out of margin. Total Advanced Connectivity revenue rose 7.2% to $29.5 billion. Segment EBITDA rose 7.3% to $12.3 billion.
Wireless slows, and the SpaceX question.
Postpaid phone net adds were 379,000. That figure came as competition among the major carriers intensifies. Postpaid phone churn rose from 0.86% in the second quarter to 0.92%. Wireless service revenue rose 5.0% to $17.76 billion. On the call, postpaid phone ARPU was said to be up 4%. So price increases support revenue, but they may also be accelerating subscriber losses. SpaceX's spectrum purchase and wireless entry was the central question on the call. CEO John Stankey argued that satellite is better suited to rural areas. He said investors should not read too much into one carrier of low-band spectrum. The market was not satisfied with that answer. Equipment revenue rose 12.2% to $5.6 billion. That increase points to heavy phone upgrade promotions.
Cash, debt and shareholder returns.
Free cash flow was $5.0 billion in the quarter, compared with $4.9 billion a year earlier. Capital investment was $5.6 billion. On the call, fourth-quarter free cash flow was guided to about $6 billion. In the same quarter last year it was $4.2 billion. The company repurchased $2.8 billion of shares in the quarter. Net debt is $149.8 billion, or 3.13x EBITDA. The increase reflects the EchoStar spectrum payment at the end of July. The company cut its 2027-28 investment budget to $22-23 billion a year. It plans more than $45 billion of shareholder returns over 2026-28, including $24 billion of buybacks. Leverage is targeted to fall to 2.5x during 2029.
Next quarter, watch one line.
Postpaid phone churn is the key to this report. It was 0.92% this quarter. If it falls back below 0.90% in the fourth quarter, the SpaceX and competition worries were overdone. Then the stock could be re-rated on its solid earnings and cash flow. If it rises above 0.95%, it has to be accepted that price increases are accelerating subscriber losses. In that case the 5% growth in wireless service revenue is also at risk. The second gauge is fourth-quarter free cash flow. If management's roughly $6 billion target is met, the annual goal of more than $18 billion is secured. The third gauge is fiber ARPU; a decline deeper than 4% would call the quality of internet growth into question. For a general method, see our guide on how to read earnings day.
Looking Ahead
Strengths and Risks
5 Strengths · 5 RisksStrengths
5- Adjusted EPS rose 20.4% year over year to $0.65, beating estimates by 8.3%.
- The company added a record 769,000 internet subscribers in the quarter.
- 2026 adjusted EPS guidance was raised from $2.25-2.35 to the $2.40 range.
- Advanced home internet revenue rose 23.4% year over year to $3.0 billion.
- More than $45 billion of shareholder returns are planned over 2026-28.
Risks
5- Postpaid phone churn rose from 0.86% in the second quarter to 0.92%.
- Fiber ARPU fell 4% year over year, with a similar decline expected in the fourth quarter.
- Net debt to EBITDA rose to 3.13x after the EchoStar purchase.
- SpaceX's entry into wireless could intensify competition.
- The Mexico sale will remove $400-500 million of annual cash flow.
What to Watch
3- CFO Pascal Desroches is retiring; Jennifer Biry takes over after year-end.
- Cash from the Mexico sale and the fiber joint venture is expected in 2027.
- Fourth-quarter results are expected in late January 2027.
Upcoming Earnings
To Understand This