Telecommunications conglomerate AT&T (NYSE: T) reported revenue ahead of Wall Street’s expectations in Q2 CY2025, with sales up 3.5% year on year to $30.85 billion. Its GAAP profit of $0.62 per share was 17% above analysts’ consensus estimates.

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Company Overview

Founded by Alexander Graham Bell, AT&T (NYSE: T) is a multinational telecomm conglomerate providing a range of communications and internet services.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. AT&T struggled to consistently generate demand over the last five years as its sales dropped at a 6.7% annual rate. This was below our standards and is a sign of poor business quality.

We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or trend. AT&T’s annualized revenue growth of 1% over the last two years is above its five-year trend, but we were still disappointed by the results.

We can better understand the company’s revenue dynamics by analyzing its most important segment, Mobility. Over the last two years, AT&T’s Mobility revenue (wireless plans) averaged 2.9% year-on-year growth. This segment has outperformed its total sales during the same period, lifting the company’s performance.

This quarter, AT&T reported modest year-on-year revenue growth of 3.5% but beat Wall Street’s estimates by 1.3%.

Looking ahead, sell-side analysts expect revenue to remain flat over the next 12 months. This projection doesn't excite us and implies its newer products and services will not lead to better top-line performance yet.

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Operating Margin

AT&T’s operating margin has shrunk over the last 12 months, but it still averaged 17.2% over the last two years, top-notch for a consumer discretionary business. This shows it’s an efficient company that manages its expenses effectively.

In Q2, AT&T generated an operating margin profit margin of 21.1%, up 1.7 percentage points year on year. This increase was a welcome development and shows it was more efficient.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

AT&T’s EPS grew at a weak 1.4% compounded annual growth rate over the last five years. On the bright side, this performance was better than its 6.7% annualized revenue declines and tells us management adapted its cost structure in response to a challenging demand environment.

In Q2, AT&T reported EPS at $0.62, up from $0.50 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects AT&T’s full-year EPS of $1.76 to grow 21%.

Key Takeaways from AT&T’s Q2 Results

We enjoyed seeing AT&T beat analysts’ EPS expectations this quarter. We were also happy its revenue narrowly outperformed Wall Street’s estimates. Overall, we think this was a decent quarter with some key metrics above expectations. Investors were likely hoping for more, and shares traded down 3.3% to $26.49 immediately following the results.

Is AT&T an attractive investment opportunity right now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free.