AT&T Inc. Q1 FY2026 earnings call

• Executed well in Q1, with 584,000 total fiber and fixed wireless advanced internet customer net additions, best ever first quarter result. • 42% of advanced home internet customers also choose AT&T Wireless, organic convergence rate ~45% excluding Lumen transaction. • Closed transaction with Lumen ahead of schedule, adding 1.1 million fiber customers and over 4 million fiber locations. • Expanded AT&T Guarantee, launched new flagship app, AT&T OneConnect, refreshed Unlimited Your Way plans. • Advanced connectivity business service revenues stabilized. • Investments positioned to accelerate and scale strategy in 2026, focusing on advanced connectivity needs and AI-enabled tools.

Consolidated total revenues up 2.9% YoY, service revenues up 1.4%. Advanced connectivity segment generates over 90% of consolidated revenue and nearly all adjusted EBITDA. Wireless service revenues grew 1.7% YoY, with 294,000 postpaid phone net ads in Q1; postpaid phone ARPU flat. Advanced Home Internet Service revenues grew 27.3% YoY, with 512,000 net ads. Business service revenues stabilized. Legacy service revenues declined ~25% YoY.

• Consolidated service revenues expected to grow in low single digits full year, driven by wireless, fiber, and fixed wireless revenues. • Adjusted EBITDA expected to grow 3%-4% full year, improved in Q2 as comparisons normalize. • Free cash flow expected $18B+ full year, Q2 free cash flow range $4B - $4.5B. • Adjusted EPS expected $2.25 - $2.35 full year. • Advanced connectivity service revenues expected to grow 5%+ this year with EBITDA growth of 6%+.

Q: On AT&T OneConnect, how widely rolled out, advertising support, target market, impact on subs; and on phone churn trend.

A: OneConnect is an iteration rollout, expected to evolve and be an important part of portfolio. Churn dynamic improves with converging customers, as converging leads to sustainable franchise and improved churn over time.

Q: On defining 'open' in network, account growth.

A: Open network involves re-engineering core network, opening APIs for flexibility, using AI. Account growth from converging customers, picking up one/two line new accounts, lift from Internet Air.

Q: On threat from satellite, MVNOs, comparison with fixed wireless.

A: AT&T positioned to be converged access provider, natural to integrate partners. Satellite has challenges, MVNOs considered for reaching parts of market.

Q: On EchoStar Spectrum acquisition, copper retirement.

A: EchoStar helps improve network performance, expand AIA. Copper retirement beneficial, 30% wire centers on shutdown schedule.

Q: On shifting away from device subsidies, EBITDA acceleration.

A: Shift is gradual, balancing portfolio. EBITDA acceleration due to service revenue growth, pricing actions, scaling Lumen, seasonal factors.

Q: On broadband market, DSL fade impact.

A: DSL base tiny, fiber growth from new accounts, need to handle all market segments, value segment from 40% to 50% important