AT&T’s third quarter results landed in line with Wall Street’s revenue expectations, but the market reacted negatively, reflecting concerns raised by management about rising subscriber acquisition costs and competitive intensity within the wireless segment. CEO John Stankey credited robust broadband net additions—AT&T’s highest in eight years—to ongoing investments in fiber and fixed wireless services. Stankey emphasized that convergence between wireless and broadband is driving higher-value, lower-churn customer relationships, while CFO Pascal Desroches acknowledged that increased equipment and acquisition expenses pressured margins despite operational cost efficiencies.
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AT&T (T) Q3 CY2025 Highlights:
- Revenue: $30.71 billion vs analyst estimates of $30.85 billion (1.6% year-on-year growth, in line)
- Adjusted EPS: $0.54 vs analyst estimates of $0.54 (in line)
- Adjusted EBITDA: $11.86 billion vs analyst estimates of $11.74 billion (38.6% margin, 1% beat)
- Operating Margin: 19.9%, up from 7% in the same quarter last year
- Market Capitalization: $182.7 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From AT&T’s Q3 Earnings Call
- Peter Supino (Wolfe Research) asked about potential competitive risks in AT&T’s fiber expansion and how the company responds to rivals reaching target homes first. CEO John Stankey emphasized AT&T’s scale, agility, and deliberate capital allocation to secure market share.
- Benjamin Swinburne (Morgan Stanley) inquired about segmentation between fiber and fixed wireless markets, as well as margin resilience amid competitive pressures. Stankey discussed targeted digital marketing and operational discipline, while CFO Pascal Desroches outlined efficiency gains from network modernization.
- John Hodulik (UBS) pressed on exposure to increased wireless promotions and the impact on ARPU. Stankey described convergence-driven ARPU pressure as a strategic, not structural, feature, and Desroches noted upcoming pricing actions to offset ARPU headwinds.
- David Barden (New Street) asked if AT&T was finished with acquisitions and focused on organic growth. Stankey stated that management is prioritizing internal execution over further M&A, leveraging recent asset purchases to drive organic performance.
- Michael Ng (Goldman Sachs) requested clarity on the expected accretion from the Lumen and EchoStar deals. Stankey reiterated confidence in conservative modeling and operational execution, citing ongoing progress with spectrum deployment and wholesale arrangements.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will watch (1) the pace of expansion and adoption for AT&T’s fiber and fixed wireless offerings, (2) integration progress and realized benefits from the Lumen and EchoStar acquisitions, and (3) improvements in operating margins tied to legacy infrastructure replacement and customer convergence. Execution against these milestones will signal AT&T’s ability to sustain growth and profitability amid a competitive landscape.
AT&T currently trades at $25.61, down from $26.03 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free for active Edge members).
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