Dive into AT&T's strong Q2 2025 earnings call, where the telecom giant not only largely beat expectations but also unveiled a significantly accelerated strategic roadmap. The company reported healthy growth across consolidated financials, with total revenues and adjusted EBITDA climbing 3.5% year over year, adjusted EPS up 6% to 54 cents, and free cash flow rising to $4.4 billion. Subscriber growth was a key highlight, with over 400,000 postpaid phone customers, 243,000 fiber additions, and a record 203,000 Internet Air net adds, tripling their total broadband net adds in a year. This strong operational execution signals AT&T's discipline and strategic focus are clearly paying off, setting a solid tone for the rest of 2025.
The strategic shifts are profound, with AT&T's converged network vision gaining significant traction. Mobility service revenue grew 3.5%, driven by a focus on high-value customers, leading to a raised full-year revenue outlook. Consumer wireline saw impressive growth, fueled by a nearly 19% increase in fiber revenue and accelerating fiber/5G convergence. Internet Air, their fixed wireless offering, has surpassed 1 million subscribers, playing a crucial role in monetizing their wireless network and serving as a funnel for future fiber migrations, directly challenging cable providers. Even business wireline showed relative outperformance, attributed to efficient cost cutting and managing legacy declines effectively.
Perhaps the most impactful revelation for investors is the massive boost in financial flexibility due to new pro-investment legislation. AT&T expects to realize between $6.5 billion and $8 billion in cash tax savings from 2025 to 2027, fundamentally enhancing their cash flow profile. This windfall is fueling an accelerated fiber deployment plan, aiming for 50-60 million locations by 2030, and driving a significant upside to free cash flow guidance, now trending in the low to mid $16 billion range for 2025 and an extra $1 billion annually for 2026/27. Furthermore, AT&T is targeting $4 billion in share repurchases by year-end 2025, signaling strong confidence in the stock and a clear path to enhanced shareholder returns, while also potentially setting the stage for opportunistic consolidation in the telecom sector.
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