AT&T Inc. Q1 2026 Earnings Call Summary

Achieved record first-quarter fiber and fixed wireless net additions, driven by an investment-led strategy focused on 5G and fiber infrastructure.

Reported a record year-over-year convergence growth rate, with nearly 45% of organic advanced home internet customers now choosing AT&T Wireless.

Management attributes improved churn and higher customer lifetime values to the ‘convergence play,’ where customers stay longer when bundling fixed and mobile services.

Stabilized Advanced Connectivity business service revenues for the first time, as growth in fiber and 5G successfully offset declines in legacy VPN and transitional services.

Asserted a structural advantage over peers by reaching 90 million locations with fiber or 5G, aiming to compete on performance rather than expensive device subsidies.

Closed the Lumin transaction ahead of schedule, integrating 1.1 million fiber customers and expanding the distribution footprint into major new metro areas.

Architected the network to support future AI-enabled applications by focusing on ultra-low latency, session control, and massive capacity across heterogeneous access technologies.

Reiterated full-year guidance for consolidated service revenue growth in the low single-digit range and adjusted EBITDA growth of 3% to 4%.

The company expects to reach over 60 million fiber locations by the end of the decade and anticipates its fiber reach will grow by approximately 8 million locations in 2026, a figure that includes new locations acquired from Lumen.

Anticipates net leverage will temporarily increase to 3.2x following the EchoStar transaction before declining to 3.0x by year-end 2026.

Projecting a return to the target 2.5x leverage range within approximately three years post-EchoStar transaction closure.

The company is targeting $4 billion in annual cost savings by the end of 2028, supported by initiatives such as AI enablement, digitalization, and the decommissioning of legacy copper infrastructure.

Legacy service revenues declined 25% year-over-year, with management expecting this trend to persist as they power down the legacy copper network.

The decline in legacy EBITDA (40%) outpaced revenue declines due to the lag between customer migration and the physical discontinuation of infrastructure.

The Lumin acquisition is expected to have an immaterial EBITDA contribution in 2026 due to front-loaded spending required to scale operations in new geographies.

Management flagged that wireless ARPU remains relatively stable as they intentionally trade off discounts for converged accounts to secure longer-term retention.