[T] AT&T: Q3 2026 Earnings Preview — Can Postpaid Churn Stay Low After Price Hikes?

AT&T (T) is one of the three national U.S. wireless carriers, serving 145 million wireless subscribers in North America at the end of 2025[1], and it runs the largest fiber broadband network in the country, with about 14.7 million broadband customers[2]. Ahead of the AT&T Q3 2026 earnings report, the calendar is fixed: the company will release results for the third quarter of 2026, ending September 30, 2026, before the NYSE opens on 2026-10-21, with a conference call at 8:30 a.m. ET[3]. The latest disclosed period is the second quarter of 2026, when revenue was $31,558 million, up 2.3% year over year, service revenue was $25,977 million, up 2.7%, and operating income was $7,038 million, up 8.3%[4]; adjusted EBITDA was $12,338 million, up 5.2%, and adjusted EPS was $0.65 against $0.54 a year earlier[5]. Operationally, the quarter brought 432,000 postpaid phone net adds with monthly postpaid phone churn of 0.86%[6] and 367,000 fiber net adds[7]. For the third quarter itself, the company has offered only one single-quarter marker: on the July 22 call, management said third-quarter free cash flow should be roughly stable year over year, with strong growth in the fourth quarter as 2025 legal settlements and a large pension contribution drop out of the comparison[8]. For the full year, AT&T maintains its outlook of 3% to 4% adjusted EBITDA growth, adjusted EPS of $2.25 to $2.35, free cash flow of $18 billion or more and capital investment of $23 billion to $24 billion[9], and it reiterated that outlook when it closed the EchoStar spectrum purchase on July 28[10]. The TipRanks earnings page showed a third-quarter consensus EPS of $0.60 on September 20, 2026, against $0.54 a year earlier[11].

Three things are worth watching in this report. The first is postpaid phone churn and net adds: AT&T raised prices in the second quarter, yet churn edged down to 0.86% from 0.87% a year earlier and net adds rose to 432,000 from 401,000[6], and because the third quarter is the stretch of the year with the heaviest device launches and promotions, these figures can show whether retention after the price increase has held or whether the second quarter merely made up for a weak first quarter. The second is fiber net adds and the convergence rate: fiber net adds rose 36.4% year over year in the second quarter[7], and 42.5% of advanced home internet households also used AT&T wireless[12], so the third-quarter reading can separate a one-time release from the completed cutover of the acquired Lumen territory from the start of sustained conversion in newly built areas. The third is the profit race between the new and old businesses and the free cash flow that follows: Advanced Connectivity segment EBITDA rose by $891 million year over year in the second quarter while Legacy segment EBITDA fell by $436 million[13], yet first-half free cash flow of $7,176 million was below the $7,540 million of a year earlier[14], so the third-quarter net figure and cash flow will test whether the full-year target of $18 billion or more and roughly $10 billion of share repurchases can both stand.

Company Background and Business Structure

AT&T is once again a company that sells only communications connectivity. It was founded in 1983, is based in Dallas, Texas, was formerly SBC Communications and adopted the AT&T name in 2005; between 2021 and 2025 it divested WarnerMedia and other media assets, and on July 2, 2025 it completed the sale of its interest in DIRECTV to TPG[15]. At the end of 2025, 120 million of its 145 million North American wireless subscribers were in the United States[1], and of about 14.7 million broadband customers, 10.4 million were fiber connections and 1.5 million used AT&T Internet Air, its 5G-based fixed wireless product[2].

The 2025 annual report still used the old segment structure, and wireless dominated it. Within the Communications segment, Mobility revenue was $89,482 million, about 74% of the segment; Business Wireline revenue was $17,231 million, down 8.4%, with an operating loss of $816 million; and Consumer Wireline revenue was $14,183 million[16], of which broadband contributed $12,187 million[17]. Business Wireline serves multinational corporations, small and mid-sized businesses, and governmental and wholesale customers[18], and the company also reports a Latin America segment made up of its wireless business in Mexico.

Starting with the first quarter of 2026, AT&T reports its U.S. business as a "new network" segment and an "old network" segment, which separates the growing part from the shrinking part for the first time[19]. The Advanced Connectivity segment holds 5G wireless, fiber and fixed wireless broadband, and business fiber and advanced connectivity services; its second-quarter 2026 revenue was $28,615 million, about 91% of consolidated revenue of $31,558 million, including wireless service revenue of $17,413 million, advanced home internet revenue of $2,926 million, business fiber and advanced connectivity revenue of $1,946 million, business transitional and other service revenue of $1,042 million and equipment revenue of $5,137 million[20]. The Legacy segment holds only voice and data services on the copper network; its second-quarter revenue was $1,632 million, down 25.9%, and it is allocated no depreciation[21].

Revenue comes from connectivity services billed monthly, and the two large acquisitions of the past two years were both made to thicken that network. Consumers and households buy phone plans and home internet, mostly financing their handsets in installments, while businesses buy wireless, dedicated lines and fiber access; the main costs are network operations and maintenance, equipment purchases, selling and customer care, and more than $20 billion a year of network capital spending. On February 2, 2026, AT&T acquired substantially all of Lumen's Mass Markets fiber business for $5,756 million, keeping the customer relationships in the Advanced Connectivity segment and placing the network assets in a wholly owned subsidiary, Forged Fiber; because the company plans to sell a controlling interest in Forged Fiber to a co-investing equity partner, the subsidiary is classified as held for sale and reported as discontinued operations[22]. On July 28, the company also closed its purchase of EchoStar spectrum licenses for approximately $23 billion, adding about 50 MHz of low-band and mid-band spectrum[10].

Financial History and Current Position

After shedding its media assets, AT&T did not return to annual revenue growth until 2025. Revenue was $122,428 million in 2023, $122,336 million in 2024 and $125,648 million in 2025, up 2.7%, including service revenue of $101,158 million and equipment revenue of $24,490 million. Operating income was $24,162 million in 2025, against $19,049 million in 2024, when the company booked $5,075 million of asset impairments and restructuring; net income attributable to AT&T was $21,953 million, double the $10,948 million of 2024, but most of that increase came from $7,754 million of other income and does not measure the operating improvement[23].

By business, 2025 growth came from wireless and broadband while business wireline dragged. Mobility service revenue was $67,384 million, up 3.1%[24]; postpaid phone net adds were 1,551,000, below the 1,653,000 of 2024, and monthly postpaid phone churn rose to 0.90% from 0.76%[25], an increase the annual report attributes in part to more customers reaching the end of their device financing periods, a factor it says normalized in the second half of 2025[26]. Consumer Wireline broadband revenue grew 8.7%[17], whereas Business Wireline revenue fell 8.4% and its operating result widened from a loss of $88 million in 2024 to a loss of $816 million[27].

Annual cash flow was enough to cover network building, dividends and buybacks at the same time. Cash from operating activities was $40,284 million in 2025, up from $38,771 million in 2024[28]; capital expenditures were $20,842 million, and adding $1,181 million of vendor financing payments brings capital investment to $22,023 million[15]. In the same year the company paid $8,180 million of dividends and repurchased about 159 million shares for $4,269 million[29].

In 2026, profit has grown clearly faster than revenue. Second-quarter 2026 revenue was $31,558 million, up 2.3%, service revenue rose 2.7%, operating income was $7,038 million, up 8.3%, and depreciation and amortization was $4,966 million, down 5.4%[4]; adjusted EBITDA was $12,338 million, up 5.2%, and adjusted EPS was $0.65[5]. Cash tells a different story: second-quarter free cash flow of $4,670 million exceeded the $4,394 million of a year earlier, but the first-half total of $7,176 million fell short of the prior-year $7,540 million because first-half capital expenditures rose to $10,577 million from $9,174 million[14].

The balance sheet is entering a period of higher leverage after the EchoStar transaction. At June 30, 2026, total debt was $143,954 million, cash was $17,570 million and net debt was $126,384 million, putting net debt at 2.68 times adjusted EBITDA for the trailing four quarters[30]. Management said on the call that the ratio should rise to the 3.2 times range once the EchoStar spectrum purchase closed and return to its 2.5 times target range within about three years of closing[8]; cash paid for interest in the second quarter was $1,798 million, up 18.9% year over year[31].

Operating Model

Nearly all of AT&T's revenue growth comes from two lines, wireless service and home internet. Revenue can be broken into wireless service revenue (paying subscribers times average monthly revenue per subscriber), home internet revenue (fiber and fixed wireless subscribers times average monthly revenue per subscriber), business connectivity revenue, equipment sales, copper-based legacy revenue that is falling more than 20% a year, and the Mexican wireless business at about 4% of revenue. In the second quarter of 2026, wireless service revenue rose by $560 million year over year and advanced home internet revenue rose by $627 million[20], a combined $1,187 million that left net growth after absorbing the $570 million decline in Legacy[21]. Subscriber counts affect revenue in the same quarter, whereas fiber coverage affects revenue with a lag of several quarters: new locations are built first, and customers convert gradually over the quarters that follow.

The direction of profit is set by a race between the new and the old businesses. Second-quarter EBITDA for the Advanced Connectivity, Legacy and Latin America segments was $12,032 million, $523 million and $227 million, respectively, with the new business up $891 million year over year and the old business down $436 million[13]. The increase in the new business comes from operating leverage, as segment service revenue grew 5.1% while operations and support expense grew only 1.4%; the old business shows the reverse, with revenue down $570 million but operating expense down only $134 million, and the company's outlook has Legacy EBITDA turning negative after 2027 until it has substantially eliminated the direct costs of the copper network[9]. Equipment sales contribute essentially no profit, since 2025 equipment revenue of $24,490 million came with equipment cost of $25,396 million[23]; operating income also benefits from lower depreciation because older assets are fully depreciated.

Free cash flow equals operating cash flow minus capital expenditures and vendor financing payments, and it has to fund dividends, buybacks and deleveraging at once. In the first half of 2026, operating cash flow was $18,396 million, capital expenditures were $10,577 million, vendor financing payments were $643 million and free cash flow was $7,176 million, while dividends paid were $3,973 million[14]. The company plans capital investment of $23 billion to $24 billion a year from 2026 through 2028, intends to maintain its annualized dividend of $1.11 per share and plans about $24 billion of share repurchases, including about $10 billion in 2026. Higher capital spending lowers current-period free cash flow first, while the fiber coverage it buys turns into revenue only over the following quarters.

The model has several blind spots, so some judgments can only be inferred indirectly. AT&T does not disclose quarterly the dollar amount of average revenue per user, handset subsidies, stand-alone operating data for the Lumen territory or realized cost savings, which leaves service revenue growth, equipment revenue, net adds and segment operating expense as the available proxies; the effect of the EchoStar spectrum on network capacity and capital spending will take years to observe, and for now only its immediate effect on leverage can be tracked. The Mexican business earned operating income of only $38 million in the second quarter, and business connectivity generated second-quarter service revenue of $5,409 million, up 1.8%[32], with the offsetting moves of new and old products already reflected in the Advanced Connectivity segment figures, so neither is examined separately here.

Industry and Competitive Position

Three national carriers dominate the U.S. wireless market, but price pressure does not come only from those three. AT&T's direct rivals are Verizon and T-Mobile, and when the annual report lists wireless competitors it names, besides the two other national providers, regional providers and resellers, certain cable companies[33], which sell phone plans on a resale basis. In broadband, the annual report says AT&T competes in most U.S. markets with large cable companies and wireless broadband providers, and that customers are dropping copper-based services for AT&T's fiber and fixed wireless as well as for competitors' fixed wireless, satellite and internet-based services[34].

AT&T's difference is that it owns both a national wireless network and the largest fiber network and sells both services to the same household. At June 30, 2026, its fiber reached 38.6 million locations, with a plan to pass more than 40 million by the end of 2026 and more than 60 million by the end of 2030[12]; the company calls customers who take both advanced home internet and postpaid phone service converged customers, and its convergence rate is the ratio of those customers to advanced home internet connections[35]. At the same date it had 74,921,000 postpaid phone subscribers[6], 12,868,000 fiber connections and 2,611,000 fixed wireless connections[7].

Competitive pressure is visible in AT&T's own data, but the available record is not enough to rank the three carriers. Monthly postpaid phone churn rose from 0.76% in 2024 to 0.90% in 2025, and in the first quarter of 2026 it was 0.89% against 0.83% a year earlier, an increase the company attributed at the time to the competitive dynamics of the industry[36]. The evidence here consists of AT&T's own disclosures and lacks rivals' churn, net adds and revenue per user on a like-for-like basis, so it supports a judgment about the direction of AT&T's own trend rather than about its share relative to peers.

Core Debates

AT&T raised prices in the second quarter and churn still fell — can that hold through the third quarter, the most competitive stretch of the year?

This question matters because wireless service accounts for more than half of AT&T's revenue and an even larger share of its profit. Monthly postpaid phone churn rose from 0.76% to 0.90% in 2025 and full-year net adds of 1,551,000 were below the prior year[25]; in the first quarter of 2026 churn worsened by another 6 basis points year over year[36] and wireless service revenue grew only 1.7%. The second quarter reversed that picture: after the price increase, wireless service revenue grew 3.3%[20], and both net adds and churn were better than a year earlier[6]. If that holds, the company's full-year target of 5% or more growth in Advanced Connectivity service revenue[9] gains its largest single support; if it does not, the second quarter was a one-time lift from pricing.

The evidence so far indicates that second-quarter growth was not bought by selling more subsidized handsets. Wireless service revenue was $17,413 million, up 3.3%, and the 10-Q attributes the growth to subscriber gains in underpenetrated categories and converged accounts and to pricing actions that were partially offset by promotional discounts on subscriber additions[37]. Postpaid phone net adds were 432,000 against 401,000 a year earlier and monthly churn was 0.86% against 0.87%[6]; the company said it added 147,000 consumer postpaid wireless accounts, its best quarter in more than three years[38]. Equipment revenue fell 0.5% in the same quarter[20], and in the Q&A management attributed lower churn to better customer cohort management, stronger convergence and modestly slower device upgrade activity[39].

A second reading is equally valid, and the available data cannot rule it out. First-half postpaid phone net adds of 726,000 were almost identical to the 725,000 of a year earlier, and first-half churn of 0.87% was still 2 basis points higher[6], so the second-quarter improvement may only have made up the first-quarter shortfall; the annual report also acknowledges that the "value customers" the company attracts, such as those aged 55 and over, carry lower revenue per user[26]. The financial transmission runs as follows: if price increases, new plans for lower-price customers and phone-plus-broadband bundles neither raise churn nor depress net adds, the paying base and revenue per user grow together, wireless service revenue growth moves from 1.7% in the first quarter to above 3%, and Advanced Connectivity EBITDA rises with it; if the price increase triggers cancellations, or rivals including cable companies' resale plans step up promotions, churn rises again, net adds have to be bought with discounts, and service revenue growth falls back.

In the third quarter, the figures to read are postpaid phone net adds and monthly churn in the 10-Q wireless operating table, compared with the prior-year values in the same table. It also matters whether wireless service revenue growth stays above 3%, whether equipment revenue again rises sharply year over year, whether the 10-Q again attributes the change in churn to competition, and whether management discloses cancellations after the price increase and the share of lower-price plans. There are two observable falsifiers: churn rising 5 basis points or more year over year, which would indicate that the price increase or cable resale plans are taking customers; or equipment revenue jumping while service revenue growth slows, which would indicate that net adds are being sustained by heavier device subsidies.

After buying Lumen's fiber, can AT&T turn the new footprint into subscribers quickly — and get those households onto its wireless service too?

Home internet is only about 9% of revenue, yet it is the company's largest source of growth, which is why the pace of conversion after this acquisition bears on the whole strategy. Advanced home internet revenue rose by $627 million year over year in the second quarter, more than the increase in wireless service revenue[20]. The strategy rests on one judgment: households that buy both phone service and broadband are less likely to leave, so it is worth investing $23 billion to $24 billion a year to lay fiber and paying $5,756 million for Lumen's Mass Markets fiber business[22]. Management says 2026 is planned to be the largest year of fiber expansion in the company's history, with 8 million new locations including more than 4 million from Lumen[40], and whether those locations are built on time and convert as planned determines revenue growth over the next several years and whether the investment pays.

The second-quarter operating figures were the strongest set in recent quarters. Fiber net adds were 367,000, up 36.4% and the best second quarter on record; fixed wireless net adds were 279,000; and the combined 646,000 exceeded the 509,000 of a year earlier and set a quarterly record[7]. Fiber locations rose by more than 1 million in the quarter to 38.6 million, and the company reiterated its target of more than 40 million by the end of 2026; the convergence rate was 42.5%[12], or about 45% excluding the customers acquired from Lumen. Management added that converged gross adds in the Lumen territory were 45% higher in June than in February[40] and that the brand and systems conversion is nearly complete[39].

The other side that has to be seen at the same time is that this growth includes consolidation and price concessions. The 27.3% growth in advanced home internet revenue[41] includes about 1.1 million acquired Lumen subscribers, and the company has not disclosed an organic growth rate; management said on the call that fiber revenue per user fell 1.3% year over year and was roughly flat excluding Lumen[38], and it listed near-term pressure on fiber revenue per user from the focus on converged customer growth as a known tradeoff, on the argument that converged customers have higher lifetime value and lower churn[42]. First-quarter fiber net adds were 292,000[43], up only 3.2% year over year, so whether the second-quarter jump was a one-time release from the Lumen cutover still needs a third quarter to verify. The positive transmission is that several million new fiber locations a year convert over the following quarters into fiber net adds and home internet revenue, the same household then adds a phone plan and becomes a converged customer with lower churn, and that supports the wireless base; the negative transmission is that price concessions on fiber to win converged customers, together with lower revenue per user from Lumen subscribers, push revenue growth below subscriber growth, while uneven construction leaves new coverage and net adds short of plan.

In the third quarter, the comparison to make is fiber net adds against the prior-year value in the same 10-Q table, along with whether they stay above 300,000. Also relevant are whether the convergence rate exceeds 42.5%, whether fiber locations reach about 39.3 million and the full-year target of more than 40 million is reiterated, how far home internet revenue growth trails subscriber growth and what management says about fiber revenue per user, and progress on the sale of a controlling interest in Forged Fiber[44]. There are three falsifiers: fiber net adds falling below the prior-year value, which would mark the second quarter as a one-time release; home internet revenue growth running clearly below subscriber growth, which would mean the price given up for convergence exceeds expectations; and slower civil construction leading to a cut in the full-year target of 40 million locations.

Can the extra profit from the growing businesses keep outrunning the profit lost as the copper network is shut down — and does it turn into cash?

By splitting itself into a new and an old segment in 2026, AT&T put this race on public display, and its outcome decides whether there is enough cash to go around. The old business earns more than $400 million less each quarter than a year earlier[13], and the company's outlook has its EBITDA turning negative after 2027[9], so the new business has to earn more than that amount extra each quarter for consolidated profit to grow. Profit then has to clear a second hurdle: capital investment of $23 billion to $24 billion in 2026, approximately $23 billion paid for EchoStar spectrum at the end of July[10], and a commitment to about $10 billion of repurchases in 2026, which with dividends comes to roughly $18 billion for the year, equal to the entire full-year free cash flow target[12]. If cash flow falls short, the company has to choose among buybacks, deleveraging and fiber construction.

In the second quarter the gain in the new business clearly outran the loss in the old one, but that is one quarter of evidence. Advanced Connectivity EBITDA was $12,032 million, up $891 million year over year, and Legacy EBITDA was $523 million, down $436 million[13], while consolidated adjusted EBITDA grew 5.2% with a margin of 39.1%[5]; in the first quarter the new business gained only $613 million and the old business lost $407 million, a much smaller net figure[43]. On the cost side, headcount at June 30 was down 4.9% year over year[31], and management said the FCC has approved the discontinuation of legacy services in more than 30% of U.S. wire centers, with approvals effective by late 2026[40], while removal of the copper network's direct costs can begin only after that.

Two questions remain open, one about the profit guidance and one about cash. First-half consolidated adjusted EBITDA growth already exceeds the full-year guidance of 3% to 4%, yet the company reiterated that guidance on July 22 and again on July 28 without raising it[10], which can be read as conservatism or as a sign that management anticipates a wider Legacy gap or higher growth spending in the second half. On cash, second-quarter free cash flow of $4,670 million beat the $4 billion to $4.5 billion range the company gave in April[45], but the first-half total was below the prior year[14], and the company's guidance is for roughly stable third-quarter free cash flow with growth concentrated in the fourth quarter[8]; arithmetic on the company's own figures shows that reaching $18 billion or more for the year requires about $10.8 billion or more in the second half. The financial transmission is that copper customers disconnecting or migrating take about $570 million off Legacy revenue each quarter year over year while direct costs fall only about $130 million, so Legacy EBITDA drops by more than $400 million a quarter; on the other side, wireless and fiber service revenue grows while operating expense barely rises, so Advanced Connectivity EBITDA gains $600 million to $900 million a quarter; when the net is positive, consolidated adjusted EBITDA grows and, after higher capital spending, becomes free cash flow for dividends, buybacks and deleveraging after the EchoStar transaction.

In the third quarter, the figure to read is whether consolidated adjusted EBITDA grows at least 3% from the $11,861 million of the prior-year quarter[30]. It also matters which is larger, the year-over-year gain in Advanced Connectivity EBITDA or the year-over-year loss in Legacy EBITDA, how third-quarter free cash flow compares with the prior-year value, whether the full-year cash target of $18 billion or more and the roughly $10 billion of repurchases are reiterated, where net debt to adjusted EBITDA stands after the EchoStar closing, and how far the copper discontinuation approvals have taken effect. There are three falsifiers: the year-over-year decline in Legacy EBITDA widening beyond $500 million while the gain in the new business falls back to its first-quarter level; third-quarter free cash flow falling more than 10% year over year; and a cut to the full-year adjusted EBITDA or free cash flow target.

Risks and Falsifiers

The first risk is the tradeoff between leverage and capital returns, and it exposes the debt balance, interest expense and free cash flow. After the roughly $23 billion EchoStar spectrum purchase and the $5,756 million Lumen acquisition, the company still raised 2026 repurchases to about $10 billion and kept its dividend at $1.11 per share; total debt was $144.0 billion and net debt $126.4 billion at the end of June[46], and net debt to adjusted EBITDA is set to rise from 2.68 times to the 3.2 times range and take about three years to return to around 2.5 times. If free cash flow falls below $18 billion, the company must choose among buybacks, deleveraging and $23 billion to $24 billion a year of capital investment; if the third-quarter report reiterates the full-year cash target of $18 billion or more and the goal of returning to around 2.5 times within three years, and the disclosed leverage is no higher than the 3.2 times range management described, this concern did not materialize in the quarter.

The second risk comes from substitute technologies and rivals in broadband, and it exposes the $2,926 million of second-quarter home internet revenue and the penetration assumptions behind the fiber investment. Large cable companies, other carriers' fixed wireless and satellite broadband all compete for the same households, the annual report notes that customers are moving to competitors' fixed wireless, satellite and internet-based services[34], and management's position is that satellite addresses only about 2% of traffic, the part its own networks do not reach[39]. If combined fiber and fixed wireless net adds keep exceeding the prior year, as the second quarter's 646,000 did against 509,000[7], competition has not yet eroded customer acquisition; conversely, combined net adds falling below the prior-year value would weaken that judgment.

The third risk is more intense wireless competition, and it exposes the growth of wireless service revenue, which was $17,413 million in the second quarter or about 55% of revenue, along with the Advanced Connectivity segment's 42.0% EBITDA margin[13]. If the two other national carriers and the cable companies that resell phone plans step up promotions, AT&T either accepts higher churn or keeps customers with more discounts and subsidies; on the current subscriber base, every 5 basis points of additional churn equals roughly 110,000 more postpaid phone customers lost per quarter. If third-quarter monthly postpaid phone churn is no higher than the prior-year value and wireless service revenue growth stays above 3%, this risk did not materialize in the quarter.

The fourth risk is the Lumen integration and fiber price concessions, and it exposes home internet revenue, the $23 billion to $24 billion of annual capital investment and the $4,474 million of Forged Fiber assets reported as discontinued operations[47]. The acquired subscribers carry lower revenue per user, the company is conceding price at every tier to win converged customers, and construction progress is uneven; if the new footprint converts slowly, fiber revenue growth will trail subscriber growth and the payback on the investment lengthens, while the sale of a controlling interest in Forged Fiber has not yet closed. If third-quarter fiber net adds exceed the prior-year value, the convergence rate exceeds 42.5% and home internet revenue growth stays above 25%, the pace of integration matches the company's account.

The fifth risk is that the copper business loses profit faster than it sheds cost, and it exposes consolidated adjusted EBITDA, which was $12,338 million in the second quarter and is guided to grow 3% to 4% for the year. Until the discontinuation approvals take effect and direct costs are removed, Legacy EBITDA falls by more than $400 million a quarter year over year and will turn negative after 2027, even though it still contributed $523 million in the second quarter[13]; if operating leverage in the new business weakens, consolidated profit growth would slip below the guidance range. If the year-over-year gain in Advanced Connectivity EBITDA again exceeds the year-over-year loss in Legacy EBITDA in the third quarter and consolidated adjusted EBITDA grows at least 3%, this risk did not materialize.

What to Watch Next

• Postpaid phone churn (wireless retention after the price increase). Baseline: 0.86% in the second quarter of 2026 against 0.87% a year earlier. A year-over-year rise of 5 basis points or more falsifies the retention reading; a figure no higher than the prior-year value confirms it.
• Postpaid phone net adds. Baseline: 432,000 in the second quarter and 726,000 in the first half. The test is whether net adds are being bought with device subsidies; a jump in equipment revenue alongside slower service revenue growth falsifies.
• Wireless service revenue. Baseline: $17,413 million in the second quarter, up 3.3%. Growth slipping below 3% would weaken the view that the price increase has held.
• Fiber net adds (Lumen conversion and convergence). Baseline: 367,000 in the second quarter, up 36.4%. The test is whether they exceed the prior-year value and stay above 300,000; a drop below the prior-year value marks the second quarter as a one-time release.
• Convergence rate. Baseline: 42.5%, or about 45% excluding Lumen. A stalled rate combined with a further decline in fiber revenue per user would mean the price given up exceeds expectations.
• Fiber locations. Baseline: 38.6 million at June 30. The markers are about 39.3 million at the end of the third quarter and a reiterated year-end target of more than 40 million; a lowered target falsifies.
• Advanced home internet revenue. Baseline: $2,926 million in the second quarter, up 27.3%. Growth holding above 25% is consistent with the company's account of the integration.
• Consolidated adjusted EBITDA (the profit race). Baseline: $12,338 million in the second quarter, up 5.2%. The comparison is growth from the $11,861 million of the prior-year third quarter; growth below 3% or a lowered full-year target falsifies.
• Segment EBITDA changes. Baseline: the new business up $891 million and the old business down $436 million. A Legacy decline beyond $500 million with the new-business gain back at its first-quarter level falsifies.
• Free cash flow (profit turning into cash). Baseline: $4,670 million in the second quarter and $7,176 million in the first half. A year-over-year decline of more than 10% in the third quarter or a lowered $18 billion target falsifies.
• Net debt to adjusted EBITDA. Baseline: 2.68 times at June 30. The first reading after the EchoStar closing matters; a ratio above the 3.2 times range management described would sharpen the choice between buybacks and deleveraging.

Conclusion

AT&T's business is now driven by two opposing forces: wireless and fiber are growing, and the copper business is shrinking. In the second quarter of 2026, wireless service and home internet revenue together rose by $1,187 million, absorbing the $570 million decline in Legacy[21]; the $891 million gain in new-business EBITDA outran the $436 million loss in the old business[13], and consolidated adjusted EBITDA grew 5.2% as a result[5]. The financial position is nonetheless not loose: first-half free cash flow was below the prior year[14], net debt to adjusted EBITDA is set to rise from 2.68 times to the 3.2 times range[8], and the company has also committed to about $10 billion of repurchases. The central unresolved relationship is whether the second quarter's combination of higher prices, lower churn, faster fiber growth and wider margins is a repeatable new normal or a single-quarter peak produced by pricing and the Lumen consolidation together.

The two outside readings published after the results point in the same direction but weigh things differently. Zacks Investment Research argued that what mattered more than the quarterly beat was management's case that the investment cycle is now showing up in both growth and operating leverage, with fiber, wireless convergence and a shrinking copper footprint reinforcing one another; it also recorded the costs, noting that adjusted EPS of $0.65 was ahead of the Zacks Consensus Estimate of $0.59 while revenue of $31.56 billion came in slightly below the $32.04 billion consensus, and that fiber revenue per user fell 1.3% as Lumen subscribers came over[48]. Terrence Hill of Tech Times supplied the opposing case: the article relays J.P. Morgan analyst Sebastiano Petti's judgment that Starlink is more of a lingering overhang on U.S. wireless than a near-term fundamental threat, and cites Recon Analytics' projection that cable resale businesses such as Spectrum Mobile and Xfinity Mobile could take more than half of industry-wide postpaid phone net adds by 2027 to 2028, which it treats as the more immediate competitive pressure in postpaid phones[49]. Both readings accept the momentum from convergence; the first maps to the debates over fiber conversion and the race between the new and old businesses, while the second questions exactly what the first debate turns on, the durability of the second-quarter improvement in net adds and churn, and both are outside interpretations rather than facts or a majority view.

The combination that would materially strengthen the current understanding is third-quarter postpaid phone churn no higher than the prior-year value with wireless service revenue growth above 3%, fiber net adds above the prior-year value with a convergence rate above 42.5%, a year-over-year gain in Advanced Connectivity EBITDA that again exceeds the loss in Legacy EBITDA, and a reiteration of full-year free cash flow of $18 billion or more and about $10 billion of repurchases. The combination that would weaken it is churn rising 5 basis points or more year over year, fiber net adds falling below the prior-year value, the Legacy decline widening beyond $500 million while the new-business gain returns to its first-quarter level, or third-quarter free cash flow falling more than 10% with the full-year target lowered. Until those readings arrive, the second-quarter acceleration rests on one quarter of evidence.

Sources

[1] T 10-K filed 2026-02-09 · wireless subscribers, coverage and convergence · 2026-02-09 · 10-K · https://www.sec.gov/Archives/edgar/data/732717/000073271726000120/

[2] T 10-K filed 2026-02-09 · Consumer Wireline broadband description · 2026-02-09 · 10-K · https://www.sec.gov/Archives/edgar/data/732717/000073271726000120/

[3] Drillr earnings calendar · T earnings call scheduled 2026-10-21 (calendar last updated 2026-09-20); AT&T press release dated 2026-08-27 says third-quarter 2026 results will be released before the NYSE opens on Wednesday, Oct. 21, 2026, with a conference call at 8:30 a.m. ET · 2026-09-20 · earnings calendar

[4] T 10-Q filed 2026-07-22 · 2Q26 consolidated results · 2026-07-22 · 10-Q · https://www.sec.gov/Archives/edgar/data/732717/000073271726000297/

[5] T 8-K filed 2026-07-22 · 2Q26 consolidated headline results · 2026-07-22 · 8-K · https://about.att.com/story/2026/2q-earnings.html

[6] T 10-Q filed 2026-07-22 · 2Q26 wireless subscribers, net adds and churn · 2026-07-22 · 10-Q · https://www.sec.gov/Archives/edgar/data/732717/000073271726000297/

[7] T 10-Q filed 2026-07-22 · 2Q26 internet connections and net adds · 2026-07-22 · 10-Q · https://www.sec.gov/Archives/edgar/data/732717/000073271726000297/

[8] T earnings call 2026-07-22 · guidance and 3Q26 free cash flow timing · 2026-07-22 · earnings-call · https://investors.att.com/financial-reports/quarterly-earnings/2026

[9] T 8-K filed 2026-07-22 · 2026-2028 outlook · 2026-07-22 · 8-K · https://about.att.com/story/2026/2q-earnings.html

[10] T 8-K filed 2026-07-28 · EchoStar spectrum acquisition closed · 2026-07-28 · 8-K · https://investors.att.com/financial-reports/sec-filings

[11] TipRanks T earnings page (accessed 2026-09-20) · 3Q26 consensus EPS · 2026-09-20 · TipRanks · https://www.tipranks.com/stocks/t/earnings

[12] T 8-K filed 2026-07-22 · 2Q26 highlights and capital return · 2026-07-22 · 8-K · https://about.att.com/story/2026/2q-earnings.html

[13] T 10-Q filed 2026-07-22 · 2Q26 segment EBITDA reconciliation · 2026-07-22 · 10-Q · https://www.sec.gov/Archives/edgar/data/732717/000073271726000297/

[14] T 8-K filed 2026-07-22 · 2Q26 free cash flow reconciliation · 2026-07-22 · 8-K · https://about.att.com/story/2026/2q-earnings.html

[15] T 10-K filed 2026-02-09 · FY2025 capital expenditures and capital investment · 2026-02-09 · 10-K · https://www.sec.gov/Archives/edgar/data/732717/000073271726000120/

[16] T 10-K filed 2026-02-09 · segment operating revenues and income 2023-2025 · 2026-02-09 · 10-K · https://www.sec.gov/Archives/edgar/data/732717/000073271726000120/

[17] T 10-K filed 2026-02-09 · Consumer Wireline results 2023-2025 · 2026-02-09 · 10-K · https://www.sec.gov/Archives/edgar/data/732717/000073271726000120/

[18] T 10-K filed 2026-02-09 · Business Wireline description · 2026-02-09 · 10-K · https://www.sec.gov/Archives/edgar/data/732717/000073271726000120/

[19] T 8-K filed 2026-04-22 · revised segments effective 1Q26 · 2026-04-22 · 8-K · https://investors.att.com/financial-reports/quarterly-earnings/2026

[20] T 10-Q filed 2026-07-22 · 2Q26 Advanced Connectivity segment results · 2026-07-22 · 10-Q · https://www.sec.gov/Archives/edgar/data/732717/000073271726000297/

[21] T 10-Q filed 2026-07-22 · 2Q26 Legacy segment results and Advanced Connectivity margins · 2026-07-22 · 10-Q · https://www.sec.gov/Archives/edgar/data/732717/000073271726000297/

[22] T 10-Q filed 2026-07-22 · Lumen Mass Markets fiber acquisition · 2026-07-22 · 10-Q · https://www.sec.gov/Archives/edgar/data/732717/000073271726000297/

[23] T 10-K filed 2026-02-09 · consolidated statements of income 2023-2025 · 2026-02-09 · 10-K · https://www.sec.gov/Archives/edgar/data/732717/000073271726000120/

[24] T 10-K filed 2026-02-09 · Mobility results 2023-2025 · 2026-02-09 · 10-K · https://www.sec.gov/Archives/edgar/data/732717/000073271726000120/

[25] T 10-K filed 2026-02-09 · Mobility net additions and churn 2023-2025 · 2026-02-09 · 10-K · https://www.sec.gov/Archives/edgar/data/732717/000073271726000120/

[26] T 10-K filed 2026-02-09 · Mobility service revenue, ARPU and churn drivers · 2026-02-09 · 10-K · https://www.sec.gov/Archives/edgar/data/732717/000073271726000120/

[27] T 10-K filed 2026-02-09 · Business Wireline results 2023-2025 · 2026-02-09 · 10-K · https://www.sec.gov/Archives/edgar/data/732717/000073271726000120/

[28] T 10-K filed 2026-02-09 · FY2025 cash from operating activities · 2026-02-09 · 10-K · https://www.sec.gov/Archives/edgar/data/732717/000073271726000120/

[29] T 10-K filed 2026-02-09 · FY2025 debt, buybacks and dividends · 2026-02-09 · 10-K · https://www.sec.gov/Archives/edgar/data/732717/000073271726000120/

[30] T 8-K filed 2026-07-22 · net debt to adjusted EBITDA · 2026-07-22 · 8-K · https://about.att.com/story/2026/2q-earnings.html

[31] T 8-K filed 2026-07-22 · 2Q26 capital expenditures, shares and employees · 2026-07-22 · 8-K · https://about.att.com/story/2026/2q-earnings.html

[32] T 10-Q filed 2026-07-22 · 2Q26 Advanced Connectivity business supplemental · 2026-07-22 · 10-Q · https://www.sec.gov/Archives/edgar/data/732717/000073271726000297/

[33] T 10-K filed 2026-02-09 · wireless competition · 2026-02-09 · 10-K · https://www.sec.gov/Archives/edgar/data/732717/000073271726000120/

[34] T 10-K filed 2026-02-09 · broadband competition · 2026-02-09 · 10-K · https://www.sec.gov/Archives/edgar/data/732717/000073271726000120/

[35] T 8-K filed 2026-07-22 · convergence and fiber location definitions · 2026-07-22 · 8-K · https://about.att.com/story/2026/2q-earnings.html

[36] T 8-K filed 2026-04-22 · 1Q26 churn and net adds commentary · 2026-04-22 · 8-K · https://investors.att.com/financial-reports/quarterly-earnings/2026

[37] T 10-Q filed 2026-07-22 · 2Q26 wireless service revenue drivers · 2026-07-22 · 10-Q · https://www.sec.gov/Archives/edgar/data/732717/000073271726000297/

[38] T earnings call 2026-07-22 · 2Q26 segment performance · 2026-07-22 · earnings-call · https://investors.att.com/financial-reports/quarterly-earnings/2026

[39] T earnings call 2026-07-22 · Q&A on churn, value plans and fiber pricing · 2026-07-22 · earnings-call · https://investors.att.com/financial-reports/quarterly-earnings/2026

[40] T earnings call 2026-07-22 · management highlights · 2026-07-22 · earnings-call · https://investors.att.com/financial-reports/quarterly-earnings/2026

[41] T 10-Q filed 2026-07-22 · 2Q26 Advanced Connectivity consumer supplemental · 2026-07-22 · 10-Q · https://www.sec.gov/Archives/edgar/data/732717/000073271726000297/

[42] T earnings call 2026-07-22 · risks and tradeoffs · 2026-07-22 · earnings-call · https://investors.att.com/financial-reports/quarterly-earnings/2026

[43] T 8-K filed 2026-04-22 · 1Q26 highlights · 2026-04-22 · 8-K · https://investors.att.com/financial-reports/quarterly-earnings/2026

[44] T 10-Q filed 2026-07-22 · Forged Fiber held for sale · 2026-07-22 · 10-Q · https://www.sec.gov/Archives/edgar/data/732717/000073271726000297/

[45] T earnings call 2026-04-22 · 1Q26 guidance and 2Q26 free cash flow range · 2026-04-22 · earnings-call · https://investors.att.com/financial-reports/quarterly-earnings/2026

[46] T 8-K filed 2026-07-22 · 2Q26 debt and segment summary · 2026-07-22 · 8-K · https://about.att.com/story/2026/2q-earnings.html

[47] T 10-Q filed 2026-07-22 · Forged Fiber held-for-sale assets · 2026-07-22 · 10-Q · https://www.sec.gov/Archives/edgar/data/732717/000073271726000297/

[48] Zacks Equity Research 2026-07-23 · T Q2 Earnings Call Points to Fiber-Led Growth Path · 2026-07-23 · Zacks Investment Research · https://finance.yahoo.com/markets/stocks/articles/t-q2-earnings-call-points-140000539.html

[49] Tech Times 2026-07-23 · AT&T Posts Record Internet Quarter, Raises Buyback as Convergence Edge Widens · 2026-07-23 · Tech Times · https://www.techtimes.com/articles/321340/20260723/t-posts-record-internet-quarter-raises-buyback-convergence-edge-widens.htm