Key Highlights
- AT&T delivered Q1 adjusted EPS of $0.57, surpassing analyst expectations of $0.55
- Quarterly revenue reached $31.5 billion, representing a 2.9% year-over-year increase and exceeding the $31.25 billion forecast
- Postpaid phone net additions totaled 294,000, outperforming the 270,000 analyst projection
- Shares climbed 0.8% in response to the quarterly performance
- The company maintained its full-year 2026 outlook, targeting free cash flow of $18 billion or more
AT&T opened Wednesday trading with a strong first quarter performance, exceeding Wall Street projections across earnings, revenue, and customer acquisition metrics.
Adjusted earnings per share reached $0.57 compared to the consensus forecast of $0.55. Total revenue hit $31.5 billion, marking a 2.9% year-over-year increase and surpassing the $31.25 billion analyst projection.
Shares moved 0.8% higher following the earnings release.
The telecommunications giant brought in 294,000 postpaid phone net subscribers during the quarter. This figure exceeded analyst forecasts of approximately 270,000 to 272,000.
The company’s bundling approach continues to gain traction. Between 42% and 45% of AT&T home internet subscribers maintain a wireless plan as well — a convergence strategy that has emerged as a significant competitive advantage.
Overall internet customer additions reached 584,000 for the quarter, with an even distribution: 292,000 fiber subscribers and 292,000 fixed wireless customers.
AT&T and competitor T-Mobile both maintained device subsidy programs throughout Q1, engaging in aggressive customer acquisition through iPhone promotions and service plan discounts.
Pricing Adjustments
AT&T implemented price increases on both its entry-level and premium wireless tiers. The strategic objective centers on migrating customers toward mid-tier service plans while improving average revenue per user metrics.
Industry analysts interpret this approach as a calculated move to optimize customer value rather than trigger competitive pricing battles.
Business Segment Realignment
Beginning this quarter, AT&T restructured its operational segments to emphasize strategic growth initiatives.
The newly formed Advanced Connectivity segment — encompassing domestic 5G and fiber operations — generated approximately 5% revenue growth. Service revenue within this segment increased 3.6% year-over-year to $22.9 billion. Operating income surged 14.8% to $6.9 billion.
Part of this expansion stems from the mass markets fiber business acquisition from Lumen.
Free cash flow totaled $2.5 billion, down from $3.1 billion in the comparable prior-year period. This decrease reflects elevated capital investment as AT&T accelerates fiber infrastructure expansion.
Capital expenditures for the quarter totaled $4.9 billion, compared to $4.3 billion in the year-ago quarter.
CEO John Stankey characterized the performance as the “best first quarter ever for Advanced Connectivity internet customer net additions.”
AT&T confirmed its full-year 2026 financial targets: adjusted EPS between $2.25 and $2.35, EBITDA expansion of 3% to 4%, and free cash flow of $18 billion minimum.
The telecommunications company also reaffirmed its commitment to repurchase roughly $8 billion in shares throughout 2026.
