AT&T(US:T)2025-07-24 20:41PART I - FINANCIAL INFORMATION Item 1. Financial Statements AT&T's unaudited consolidated financial statements for Q2 2025, including income, balance sheet, cash flows, and equity Key Financial Highlights (Q2 & H1 2025 vs 2024) | Financial Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Operating Revenues | $30,847 M | $29,797 M | $61,473 M | $59,825 M | | Operating Income | $6,501 M | $5,760 M | $12,255 M | $11,607 M | | Net Income Attributable to AT&T | $4,500 M | $3,597 M | $8,851 M | $7,042 M | | Diluted EPS | $0.62 | $0.49 | $1.22 | $0.96 | Key Balance Sheet Data (as of June 30, 2025) | Balance Sheet Item | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Assets | $405,491 M | $394,795 M | | Total Liabilities | $283,914 M | $276,550 M | | Long-Term Debt | $123,057 M | $118,443 M | | Total Stockholders' Equity | $121,394 M | $118,245 M | Cash Flow Summary (Six months ended June 30) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $18,812 M | $16,640 M | | Net Cash Used in Investing Activities | $(11,044) M | $(6,977) M | | Net Cash Used in Financing Activities | $(598) M | $(13,293) M | - In December 2024, the Board authorized a $10 billion stock repurchase program. In the first six months of 2025, the company repurchased approximately 34 million shares for $958 million19 - On May 21, 2025, AT&T agreed to acquire substantially all of Lumen's mass markets fiber business for $5.75 billion in cash, a transaction expected to close in the first half of 202698 - The sale of AT&T's interest in DIRECTV to TPG Capital was completed on July 2, 2025. The company expects to record a significant gain on the sale in the third quarter of 202587 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management analyzes Q2 and H1 2025 financial results, segment performance, liquidity, and capital resources Consolidated Results of Operations Consolidated revenues and income increased in Q2 and H1 2025, driven by Mobility and Consumer Wireline growth Consolidated Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Operating Revenues | $30,847 M | $29,797 M | 3.5% | | Service Revenues | $25,292 M | $25,006 M | 1.1% | | Equipment Revenues | $5,555 M | $4,791 M | 15.9% | | Operating Income | $6,501 M | $5,760 M | 12.9% | | Net Income Attributable to AT&T | $4,500 M | $3,597 M | 25.1% | - Revenue growth was driven by Mobility and Consumer Wireline, partially offset by declines in Business Wireline and unfavorable foreign exchange in Mexico104 - Equity in net income of affiliates increased significantly, reflecting cash distributions from DIRECTV in excess of the investment's carrying amount. The interest in DIRECTV was sold on July 2, 2025108 - A gain in the range of $5.5 billion is expected to be recognized in Q3 2025 from the sale of DIRECTV110 Communications Segment Results Communications segment revenue grew in Q2 2025, driven by Mobility and Consumer Wireline, despite Business Wireline decline Communications Segment Performance (Q2 2025 vs Q2 2024) | Business Unit | Revenue (Q2 2025) | % Change YoY | Operating Income (Q2 2025) | % Change YoY | | :--- | :--- | :--- | :--- | :--- | | Mobility | $21,845 M | 6.7% | $6,931 M | 3.2% | | Business Wireline | $4,313 M | (9.3)% | $(201) M | - | | Consumer Wireline | $3,541 M | 5.8% | $335 M | 82.1% | | Total Communications | $29,699 M | 3.9% | $7,065 M | 0.9% | Mobility Key Metrics (Q2 2025) | Metric | Value | YoY Change | | :--- | :--- | :--- | | Postpaid Phone Net Additions | 401,000 | (4.3)% | | Postpaid Phone-Only Churn | 0.87% | +17 BP | Consumer Wireline Key Metrics (Q2 2025) | Metric | Value | YoY Change | | :--- | :--- | :--- | | Fiber Broadband Net Additions | 243,000 | 1.7% | | Fiber Broadband Connections | 9.8 million | 11.8% | - Business Wireline's revenue decline was driven by a 17.3% drop in legacy and other transitional services, which was partially offset by 3.5% growth in fiber and advanced connectivity services125 Latin America Segment Results Latin America revenue decreased due to FX, but operating income and EBITDA margin improved with subscriber growth Latin America (Mexico) Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Segment Revenues | $1,054 M | $1,103 M | (4.4)% | | Service Revenues | $662 M | $699 M | (5.3)% | | Equipment Revenues | $392 M | $404 M | (3.0)% | | Operating Income | $46 M | $6 M | — | | EBITDA | $201 M | $178 M | 12.9% | - Revenue decreases were primarily driven by unfavorable foreign exchange impacts, which were partially offset by subscriber growth140 - Total Mexico wireless subscribers grew 5.3% year-over-year to 23.8 million, with postpaid net additions of 183,000 in the quarter139140 Liquidity and Capital Resources AT&T's liquidity improved in H1 2025, funding capital expenditures, dividends, and stock repurchases Capital Resources Summary | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $10,499 M | $3,298 M | | Total debt | $132,311 M | $123,532 M | - Cash from operating activities for H1 2025 was $18.8 billion, an increase from $16.6 billion in H1 2024147149 - Capital investment, including capital expenditures ($9.2B) and cash paid for vendor financing ($0.4B), totaled $9.6 billion in H1 2025151152 - During H1 2025, the company repurchased $958 million of common stock and paid $4.1 billion in dividends159160 - The company maintains a $12 billion revolving credit agreement, which was undrawn as of June 30, 2025162 Item 3. Quantitative and Qualitative Disclosures About Market Risk AT&T manages market risks using derivative instruments, primarily cross-currency swaps for foreign-denominated debt - The company uses cross-currency swaps to hedge exposure to foreign currency exchange rates and interest rates on its foreign-denominated debt169 - As of June 30, 2025, the notional value of these cross-currency swaps was $36,499 million, with a net fair value of $(890) million169 Item 4. Controls and Procedures Disclosure controls were effective as of June 30, 2025, with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the quarter170 - No material changes to internal control over financial reporting were identified during the most recent fiscal quarter171 PART II – OTHER INFORMATION Item 1A. Risk Factors Updated risk factors highlight challenges in business transformation and AI integration, including incorrect AI outputs and data breaches - The company may not realize the expected benefits from its business transformation initiatives, which are designed to reduce costs, streamline operations, and improve customer experience177 - The use of artificial intelligence (AI) introduces risks, including the potential for incorrect or harmful outputs, the release of private information, and infringement of intellectual property, which could expose the company to liability and reputational damage177 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Details Q2 2025 common stock repurchases: 34.5 million shares for $960 million under a $10 billion authorization Common Stock Repurchases (Q2 2025) | Period | Total Shares Purchased | Average Price Paid Per Share | Shares Purchased as Part of Publicly Announced Program | | :--- | :--- | :--- | :--- | | April 2025 | 16,756 | $28.44 | — | | May 2025 | 6,491,464 | $27.43 | 6,400,000 | | June 2025 | 27,977,713 | $27.96 | 27,974,887 | | Total Q2 | 34,485,933 | $27.86 | 34,374,887 | - The repurchases were made under a $10 billion authorization approved in December 2024, which has no expiration date. As of June 30, 2025, approximately $9.04 billion remained available under this program178179