The Conversation (0)
Tomorrow, AT&T's Chief Financial Officer will participate in a fireside chat at 8:00 a.m. ET to discuss the Company's progress on its multi-year growth strategy
Key Takeaways:
- AT&T's planned new segment reporting, beginning with its first-quarter 2026 results, will provide investors with a better framework for assessing the returns on the Company's growth investments in 5G and fiber.
- Acquisition of Lumen's Mass Markets fiber business provides significant opportunities to grow AT&T's base of high-value converged customers that subscribe to both its advanced home internet and 5G wireless services.
- AT&T reiterates all full-year 2026 and multi-year financial and operational guidance and capital return plans shared during its fourth-quarter 2025 earnings call.
Pascal Desroches, Chief Financial Officer, AT&TÂ (NYSE:T), will speak tomorrow at the Deutsche Bank Media, Internet & Telecom Conference where he will provide an update to shareholders.
Planned new segment reporting to provide investors with better visibility into drivers of AT&T's investment-led convergence strategy
As disclosed with the Company's fourth-quarter 2025 results, AT&T plans to revise its operating segments to reflect the evolution of its business model to focus on delivering advanced connectivity services across 5G and fiber to consumer and business customers. Beginning with the Company's first-quarter 2026 results, the Company's planned new reportable segments will be:
- Advanced Connectivity, which represents results primarily from the Company's domestic 5G and fiber-based wireless, internet and other advanced connectivity services, on a recast basis contributed approximately 90% of consolidated revenues in 2025. Results for this segment will be provided in aggregate with supplemental disclosures for performance of the Company's consumer and business relationships.
- Legacy, which represents results from the Company's domestic legacy voice and data services provided over its copper-based network to consumer and business customers. These results include revenues derived from copper-based services and direct operating costs.
- Latin America, which will continue to represent results for the Company's wireless business in Mexico.
By separating the performance of AT&T's advanced connectivity business from its declining legacy segment, investors will have greater transparency into the returns generated from growth investments in 5G and fiber and how the Company is advancing with its legacy shutdown.
Additional information on AT&T's planned new segments, including a recast of quarterly and annual results from the past three years under this framework, can be found on the Company's Investor Relations website.
First quarter results to reflect acquisition of fiber assets from Lumen
AT&T closed its transaction to acquire substantially all of Lumen's Mass Markets fiber business on February 2, sooner than originally anticipated. The Company's first-quarter 2026 results will reflect the impact of the acquisition from this date.
This includes the acquisition of over 1 million fiber internet customers across over 4 million fiber locations, which is well below AT&T Fiber penetration of 40% at the end of 2025. In addition, fewer than 1 in 5 of these customers are also subscribers to AT&T's wireless services, which is well below the Company's fiber convergence rate in the fourth quarter of 2025 of 42%. AT&T sees significant opportunity to increase fiber penetration and convergence of its fiber and wireless services within the acquired footprint to levels more consistent with its historical results as it increases its investment in these geographies.
The Company holds the acquired fiber network assets, including certain fiber network build capabilities, in a wholly owned subsidiary. AT&T plans to sell partial ownership in this subsidiary to an equity partner that will co-invest in the ongoing business. Beginning with its first-quarter 2026 results, AT&T expects to report this business as held-for-sale and discontinued operations, with the results of operations and direct cash flows excluded from the Company's continuing operations. After closing the anticipated sale of partial ownership to an equity partner, AT&T's share of the equity income (loss) of this subsidiary will be included in adjusted EPS from continuing operations.
AT&T remains on track to achieve its 2026 and multi-year financial guidanceÂ
AT&T reiterates all full-year 2026 and multi-year financial guidance and capital return plans provided with its fourth-quarter 2025 earnings report, including its outlook for improved growth in adjusted EBITDA and adjusted EPS and higher free cash flow through 2028, as well as plans to return $45 billion+ to shareholders during 2026-2028 through dividends and share repurchases. For the first quarter of 2026, the Company continues to expect free cash flow in the range of $2.0 to $2.5 billion. The Company also continues to expect full-year 2026 growth in adjusted EBITDA in the 3% to 4% range, with year-over-year growth in the low-single-digit range during the first quarter.
AT&T expects that its net debt-to-adjusted EBITDA ratio will increase to approximately 3.2x following its transaction with EchoStar – which the Company expects to close in early 2026 – and to decline to approximately 3x by the end of 2026. AT&T continues to expect net leverage will return to a level consistent with its target in the 2.5x range within approximately three years following the closing of this acquisition. The Company expects to maintain a consistent approach to capital returns while reducing net leverage to its target range.Â
Conference details and more are available on the AT&T Investor Relations website
Tune in for the fireside chat with Pascal Desroches at the Deutsche Bank Media, Internet & Telecom Conference, scheduled to begin at 8:00 a.m. ET. The webcast will be available live and for replay on the AT&T Investor Relations website.
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About AT&T
We help more than 100 million U.S. families, friends and neighbors, plus nearly 2.5 million businesses, connect to greater possibility. From the first phone call 140+ years ago to our 5G wireless and multi-gig internet offerings today, we @ATT innovate to improve lives. For more information about AT&T Inc. (NYSE:T), please visit us at about.att.com. Investors can learn more at investors.att.com.
Cautionary Language Concerning Forward-Looking Statements
Information set forth in this news release contains financial estimates and other forward-looking statements that are subject to risks and uncertainties, and actual results might differ materially. A discussion of factors that may affect future results is contained in AT&T's filings with the Securities and Exchange Commission. AT&T disclaims any obligation to update and revise statements contained in this news release based on new information or otherwise. This news release may contain certain non-GAAP financial measures. Reconciliations between the non-GAAP financial measures and the GAAP financial measures are available on the company's website at investors.att.com. Net debt, adjusted EBITDA and free cash flow estimates depend on future levels of revenues, expenses, capital expenditures, cash paid for vendor financing and other metrics which are not reasonably estimable at this time. Accordingly, we cannot provide a reconciliation between projected net debt-to-adjusted EBITDA, adjusted EBITDA or free cash flow and the most comparable GAAP metrics and related ratios without unreasonable effort.
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