AT&T Q2 2025 Earnings: 6% EPS Gain, $4.4B Free Cash Flow, and 10% Share Repurchases

AT&T reported a 6% YoY gain in adjusted EPS to $0.54, beating analyst expectations. Free cash flow increased 10% YoY to $4.4 billion, enabling $1.0 billion in share repurchases. Business Wireline segment revenue declined and operates at a loss, despite growth in advanced connectivity.

AT&T Inc. (T, Financial) reported robust financial results for the second quarter of 2025, highlighting significant growth in key business segments and a strong outlook for the remainder of the year. The telecommunications giant reported a 6% year-over-year (YoY) increase in adjusted earnings per share (EPS) to $0.54, surpassing analyst expectations. This performance was driven by strong service revenue growth, particularly in Mobility and Consumer Wireline segments [1].

Free cash flow (FCF) also improved significantly, increasing by 10% YoY to $4.4 billion. This financial strength enabled AT&T to repurchase approximately $1.0 billion in common shares during the quarter [1]. The company's capital expenditures (CapEx) remained substantial, totaling $4.9 billion, with a significant portion allocated to network upgrades and expansions [1].

However, AT&T's Business Wireline segment experienced a decline in revenue, operating at a loss despite growth in advanced connectivity services. This segment continues to face challenges, including pressures on legacy services and a competitive market [1].

AT&T expects to realize significant cash tax savings of $6.5 to $8.0 billion over the next three years due to provisions in the One Big Beautiful Bill Act. These savings will be used to accelerate the company's fiber internet build-out and fund strategic investments, including a planned pension contribution of $1.5 billion by the end of 2026 [1]. The company has also agreed to acquire substantially all of Lumen's Mass Markets fiber business, further strengthening its connectivity portfolio [1].

Looking ahead, AT&T anticipates continued growth in Mobility and Consumer Wireline segments, with adjusted EBITDA growth of 3% or better for the full year 2025. The company expects capital investment to remain in the $22 to $22.5 billion range, and free cash flow to be in the low-to-mid $16 billion range, including pension funding [1].

In summary, AT&T's strong second-quarter performance underscores the company's ability to grow in a highly competitive market. The anticipated tax savings and strategic investments position the company for further growth and financial flexibility in the coming years.

References:
[1] https://www.prnewswire.com/news-releases/att-reports-strong-second-quarter-financial-performance-302511875.html