AT&T Inc. 5.35% GLB NTS 66

What they do

AT&T operates in two reportable segments: Communications (~97% of 2025 revenue) and Latin America (~3%). The Communications segment includes Mobility (nationwide wireless service and equipment), Business Wireline (fiber, fixed wireless, IP voice, and managed services to businesses), and Consumer Wireline (fiber broadband, fixed wireless access, and legacy voice). The Latin America segment provides wireless service and equipment in Mexico.

Revenue drivers

• Mobility — Nationwide wireless service and equipment sales. In Q2 2026, postpaid phone net adds were 432,000 with churn of 0.86%. Mobility revenue contributes the largest share within Communications.
• Consumer Wireline — Provides broadband services, including fiber and fixed wireless (AT&T Internet Air). In Q2 2026, fiber net adds were 367,000 and fixed wireless net adds were 279,000. Total fiber locations reached 38.6 million.
• Business Wireline — Offers advanced ethernet fiber services, fixed wireless, IP Voice, and managed professional services to business customers globally. This unit supports the enterprise and wholesale segments.
• Latin America — Wireless service and equipment sales in Mexico. Accounted for about 3% of 2025 segment operating revenue and had $145 million in segment operating income in 2025, up from $40 million in 2024.

Recent performance

For the second quarter of 2026, AT&T reported revenues of $31.6 billion, up 2.3% year-over-year. Diluted EPS from continuing operations was $0.66 (adjusted EPS $0.65). Operating income was $7.0 billion, and cash from operating activities was $10.8 billion. Free cash flow was $4.7 billion. The company added over 1 million Advanced Connectivity customers, including 646,000 consumer and business internet net adds and 432,000 postpaid phone net adds.

Strategy

AT&T is pursuing an investment-led strategy focused on expanding its fiber network (targeting over 40 million fiber locations by end of 2026 and over 60 million by end of 2030) and growing its base of converged customers. The company plans to accelerate share repurchases in 2026 to approximately $10 billion. Management emphasizes structural advantages in fiber and 5G and expects to return $45 billion+ to shareholders through dividends and buybacks from 2026-2028.

Risks

• Macro-economic headwinds — Adverse changes in securities markets, higher interest rates, inflation, and rising medical costs could increase benefit plan costs and funding requirements.
• Regulatory compliance costs — AT&T subsidiaries are subject to federal, state, and foreign regulations; compliance may be costly and affect results of operations and cash flow.
• Legacy service revenue decline — The company expects legacy service revenue to decline 20%+ in 2026 and become immaterial by 2029, while legacy EBITDA turns negative after 2027.
• Debt and liquidity risk — As of June 30, 2026, total debt was $143.95 billion; the company expects its net debt-to-adjusted EBITDA ratio to return to a target of ~2.5x within about three years of closing the EchoStar transaction.

Outlook

Management reiterated its full-year 2026 and multi-year financial guidance. Expected 2026-2028 trends include service revenue growth in the low-single-digit range, Advanced Connectivity service revenue growth in the mid-single-digit range, and adjusted EBITDA growth of 3%-4% in 2026 improving to 5% or better in 2028. Adjusted EPS for 2026 is forecast at $2.25 to $2.35. Free cash flow is expected to increase through 2028.