What caused AT&T's gross profit growth in Q1 2023?

AT&T's gross profit grew by 0.05% in Q1 2023, reaching $16.98 billion. This growth can be attributed to several key factors: 1. **Subscriber Growth**: AT&T experienced significant subscriber growth, adding 656,000 postpaid phone subscribers and 280,000 Fiber customers during the quarter. This increase in subscribers, particularly in the postpaid phone and Fiber segments, contributes to higher revenue and gross profit. 2. **Revenue Growth**: The company reported strong revenue growth, with wireless service revenue growing by 4% or higher and broadband revenue growing by 5% or higher. This growth in revenue is a direct result of the increase in subscribers and the expansion of services. 3. **Cost Management**: AT&T's efforts to manage costs effectively also contributed to the growth in gross profit. The company generated more than $14 billion in free cash flow and cut its net debt by $24 billion, achieving over $5 billion of the $6 billion run-rate in cost-savings targets. This financial discipline likely led to improved gross profit margins. 4. **Strategic Focus**: AT&T's decision to refocus on its core telecom business and divest non-core assets, such as DirectTV and Warner Media, has likely streamlined its operations and reduced costs, thereby enhancing gross profit margins. In conclusion, AT&T's gross profit growth in Q1 2023 was driven by subscriber growth, revenue expansion, effective cost management, and a strategic focus on its core business segments.