AT&T’s Solid First Quarter Performance Driven by Mobility and Consumer Wireline Growth

AT&T Inc. reported strong financial results for the first quarter of 2025, with consolidated operating revenues increasing 2.0% year-over-year to $30.6 billion. The company’s performance was driven by growth in its Mobility and Consumer Wireline business units, partially offset by declines in Business Wireline and Latin America.

Consolidated Financial Performance

AT&T’s consolidated operating revenues increased 2.0% in Q1 2025 compared to the prior year period, reaching $30.6 billion. This was primarily due to higher Mobility and Consumer Wireline revenues, which offset declines in Business Wireline and Latin America.

Operations and support expenses increased 2.9% to $19.7 billion, mainly due to higher Mobility equipment costs from increased wireless device sales volumes and higher restructuring charges. These increases were partially offset by expense declines from the company’s transformation efforts and lower network-related costs.

Depreciation and amortization expense rose 2.8% to $5.2 billion, primarily due to ongoing capital spending for strategic initiatives like fiber and network upgrades, partially offset by lower depreciation from the company’s Open RAN network modernization.

Operating income decreased 1.6% to $5.8 billion, with the operating income margin declining from 19.5% in Q1 2024 to 18.8% in Q1 2025. Interest expense decreased 3.8% to $1.7 billion, driven by lower debt balances.

Equity in net income of affiliates increased significantly to $1.4 billion, reflecting cash distributions received by AT&T in excess of the carrying amount of its DIRECTV investment. Other income increased 0.9% to $455 million.

Income before income taxes grew 23.0% to $6.0 billion, and net income attributable to AT&T increased 26.3% to $4.4 billion. The effective tax rate decreased from 23.0% in Q1 2024 to 21.7% in Q1 2025, reflecting larger discrete state tax benefits.

Segment Performance

The Communications segment, which includes Mobility, Business Wireline, and Consumer Wireline, saw a 2.4% increase in operating revenues to $29.6 billion. Segment operating income grew 3.6% to $7.0 billion, with the operating income margin improving from 23.4% to 23.7%. The Communications EBITDA margin also increased from 39.8% to 40.5%.

Mobility Results Mobility revenues increased 4.7% to $21.6 billion, driven by growth in both service and equipment revenues. Service revenues rose 4.1%, reflecting postpaid phone ARPU growth and subscriber gains. Equipment revenues were up 6.9% due to higher wireless device sales volumes.

Operations and support expenses increased 5.7%, primarily due to higher equipment costs from the higher sales volumes, as well as higher advertising, promotion, and network costs. Depreciation expense grew 1.6%.

Mobility operating income increased 4.2% to $6.7 billion, with the operating margin decreasing slightly from 31.4% to 31.2%. The Mobility EBITDA margin declined from 43.5% to 43.0%.

Mobility added 120,000 net new subscribers in Q1 2025, down from 741,000 in the prior year period. Postpaid phone net additions were 324,000, down 7.2% year-over-year. Postpaid churn increased 10 basis points to 0.99%, while postpaid phone-only churn rose 11 basis points to 0.83%.

Business Wireline Results Business Wireline revenues declined 9.1% to $4.5 billion, driven by a 17.4% decrease in legacy and other transitional services, partially offset by a 4.5% increase in fiber and advanced connectivity services.

Operations and support expenses decreased 12.0%, primarily due to lower personnel costs from ongoing transformation initiatives, lower network-related costs, and the contribution of the cybersecurity business to the LevelBlue joint venture. Depreciation expense increased 10.0%.

Business Wireline reported an operating loss of $98 million, compared to operating income of $64 million in the prior year period. The operating margin decreased from 1.3% to -2.2%, though the EBITDA margin improved from 29.0% to 31.3%.

Consumer Wireline Results Consumer Wireline revenues increased 5.1% to $3.5 billion, driven by a 9.6% rise in broadband revenues, partially offset by declines in legacy voice and data services.

Operations and support expenses decreased 1.4%, reflecting lower customer support and network-related costs. Depreciation expense grew 7.7%.

Consumer Wireline operating income increased 63.8% to $349 million, with the operating margin improving from 6.4% to 9.9%. The EBITDA margin expanded from 32.7% to 36.9%.

Broadband net additions were 137,000, up from 55,000 in the prior year period. Fiber broadband net additions were 261,000, a 3.6% increase year-over-year.

Latin America Segment Revenues in the Latin America segment, which includes Mexico, declined 8.7% to $971 million, reflecting unfavorable foreign exchange impacts. Service revenues decreased 10.9%, while equipment revenues fell 4.6%.

Operations and support expenses decreased 11.9%, and depreciation and amortization expense was down 15.3%, both primarily due to favorable foreign exchange impacts.

Operating income improved to $43 million, compared to $3 million in the prior year period. The operating margin increased from 0.3% to 4.4%, and the EBITDA margin expanded from 16.9% to 19.9%.

Mexico wireless net additions were 32,000, down from 143,000 in Q1 2024.

Liquidity and Capital Resources

AT&T generated $9.0 billion in cash from operating activities in Q1 2025, up from $7.5 billion in the prior year period. This increase was driven by higher cash flows related to DIRECTV, including a $1.1 billion dividend, as well as operational growth.

Cash used in investing activities was $5.0 billion, primarily for $4.3 billion in capital expenditures (including $203 million in vendor financing payments). The company also invested $560 million in a new strategic partner related to wireline network transformation.

Financing activities used $553 million in cash, mainly for debt repayments, dividend payments, preferred stock repurchases, and vendor financing payments, partially offset by debt issuances.

AT&T had $6.9 billion in cash and cash equivalents as of March 31, 2025, up from $3.3 billion at the end of 2024. Total debt stood at $126.2 billion, up from $123.5 billion at the end of 2024. The company’s debt ratio was 50.9%, compared to 50.7% at the end of 2024.

Outlook and Strategic Priorities

AT&T’s first quarter results demonstrate the company’s ability to execute on its strategic priorities and drive growth in its core business units. The Mobility and Consumer Wireline segments continue to perform well, offsetting challenges in the Business Wireline unit.

Going forward, AT&T will focus on further expanding its fiber footprint, modernizing its network through initiatives like Open RAN, and optimizing its operations to improve efficiency and profitability. The company will also look to leverage its DIRECTV investment and explore new growth opportunities in areas like 5G and edge computing.

Despite some near-term headwinds, AT&T’s diversified business model, strong liquidity position, and strategic initiatives position the company well to navigate the competitive landscape and deliver long-term value for shareholders.