AT&T Delivers Strong Third-Quarter 2026 Results with Its Best Consolidated Service Revenue Growth in More Than Four Years

AT&T delivered a stronger operating quarter in its continuing operations. Consolidated revenue rose 5.3% year over year to $32.3 billion, adjusted EBITDA increased 5.4% to $12.5 billion, adjusted operating income increased to $7.6 billion from $6.6 billion, and adjusted EPS increased to $0.65 from $0.54. Free cash flow was $5.0 billion, compared with $4.9 billion in the year-ago quarter. GAAP earnings were materially affected by the $2.6 billion non-cash impairment charge tied to the held-for-sale Mexico wireless business and employee separation charges, while the prior-year EPS included a gain on the DIRECTV investment.

Advanced Connectivity was the principal source of growth. Segment operating revenues rose 7.2% to $29,481 million, led by 6.1% service-revenue growth and 12.2% equipment-revenue growth. Advanced home internet revenue grew 23.4%, including the acquired mass markets fiber business, while business fiber and advanced connectivity revenue increased 8.7%. The segment expanded operating income 18.9% to $7,628 million and operating income margin by 260 BP to 25.9%, even as EBITDA margin remained 41.8%.

Customer activity supported the growth profile. AT&T recorded 769,000 total consumer and business Advanced Connectivity internet net adds, including 442,000 fiber and 327,000 fixed wireless, alongside 379,000 postpaid phone net adds. Postpaid phone churn was 0.92%, and 42.8% of households with AT&T advanced home internet also chose AT&T wireless. The company reached more than 39 million total consumer and business locations with fiber and continues to target over 40 million locations by the end of 2026.

The portfolio mix is shifting further toward Advanced Connectivity as Legacy contracts. Legacy operating revenues declined 24.5% to $1,519 million and EBITDA declined 26.7% to $498 million as AT&T decommissions its copper-based network. Latin America produced 13.2% revenue growth to $1,240 million, driven by foreign exchange and postpaid subscriber growth, but AT&T has agreed to sell the Mexico wireless business, which comprises the entire Latin America segment. The company applied held-for-sale accounting in continuing operations as of September 30, 2026.

Cash generation remained positive despite elevated investment. Cash from operating activities from continuing operations increased to $10.5 billion, capital investment was $5.6 billion, and free cash flow was $5.0 billion. AT&T returned approximately $4.8 billion to shareholders, including $2.8 billion in common share repurchases. Total debt was $159.6 billion and net debt was $149.8 billion, both sequentially higher because of the EchoStar spectrum transaction.

Management increased its 2026 adjusted EPS outlook to the $2.40 range and lowered long-term capital-investment expectations. The company expects capital investment of $23 billion to $24 billion in 2026 and $22 billion to $23 billion annually in 2027 and 2028, while maintaining free-cash-flow targets of $18 billion+ in 2026, $19 billion+ in 2027, and $21 billion+ in 2028. The key operating milestones are 5%+ Advanced Connectivity service-revenue growth and 6%+ Advanced Connectivity EBITDA growth in 2026, continued fiber expansion, and execution of the Mexico wireless sale and shareholder-return plan.