Earnings call transcript: AT&T Q3 2025 sees stable EPS but stock dips

AT&T reported Q3 2025 adjusted earnings per share of $0.54, matching analyst forecasts, but revenue of $30.7 billion slightly missed expectations. This revenue shortfall and ongoing competitive pressures in the wireless market prompted a 5.49% decline in AT&T's stock during pre-market trading. Despite the market reaction, the company achieved 1.6% year-over-year revenue growth, a 2.4% increase in adjusted EBITDA, and robust subscriber growth in fiber and broadband, marking its highest total broadband net adds in eight years. AT&T reaffirmed its full-year financial guidance, emphasizing its strategy to drive organic growth and profitability through converged customer relationships and pending acquisitions of Lumen fiber assets and EchoStar spectrum.

Analysis

AT&T reported Q3 2025 adjusted earnings per share of $0.54, aligning with analyst expectations, but revenue of $30.7 billion slightly missed the $30.89 billion forecast. This marginal revenue shortfall, coupled with persistent competitive pressures in the wireless market, triggered a 5.49% decline in AT&T's stock during pre-market trading, pushing shares closer to their 52-week low. The market's negative reaction underscores sensitivity to top-line performance despite meeting profit targets.

Despite the revenue miss, AT&T demonstrated underlying operational strength, achieving 1.6% year-over-year revenue growth and a 2.4% increase in adjusted EBITDA. The company reported its highest total broadband net adds in eight years, driven by robust fiber and Internet Air subscriber growth, with fiber customers doubling over five years. This highlights successful execution in its strategic shift towards high-value converged services.

AT&T reiterated its full-year guidance, projecting low single-digit service revenue growth and 3% or better adjusted EBITDA growth, with adjusted EPS expected at the higher end of the $1.90-$2.07 range. Management expressed confidence in its strategic initiatives, including the pending acquisitions of Lumen fiber assets and EchoStar spectrum, which are anticipated to significantly boost organic growth and profitability, reinforcing a long-term optimistic outlook despite short-term market volatility.

Key Decisions for Investors

• Investors should closely monitor AT&T's future revenue performance against guidance, as the market reacted negatively to the Q3 miss despite strong underlying operational metrics.
• Assess the progress and financial accretion from the Lumen fiber and EchoStar spectrum acquisitions, which are critical for AT&T's stated organic growth and profitability targets.
• Evaluate the company's ability to sustain subscriber growth in its converged fiber and wireless offerings and manage competitive pressures in the wireless market to mitigate churn and maintain ARPU.