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

Financial Outlook and Capital Allocation Plan

AT&T is increasing its outlook for 2026 adjusted EPS* and lowering its long-term outlook for capital investment. AT&T maintains its long-term outlook for improved growth in adjusted EBITDA* and adjusted EPS* and higher free cash flow* through 2028, its plans to return $45 billion+ to shareholders during 2026-2028 through dividends and share repurchases, and an expectation that its net debt-to-adjusted EBITDA ratio* will return to a level consistent with its target in the 2.5x range during 2029.

AT&T's long-term outlook is presented on a continuing operations basis and, for 2027-2028, excludes AT&T Mexico, which it has agreed to sell to Grupo Televisa and Fintech Holdings.

The Company's long-term outlook for 2026-2028 includes4:

• Service revenuegrowth in the low-single-digit range annually

  • Advanced Connectivity service revenuegrowth in the mid-single-digit range annually, including expected growth of 5%+ in 2026

  • Legacy service revenuedecline of 20%+ in 2026 and be immaterial by the end of 2029

• Adjusted EBITDA*growth in the upper portion of the 3% to 4% range in 2026, improving to 5% or better in 2028

  • Advanced Connectivity EBITDA*growth in the mid-to-high-single-digit range annually, including expected growth of 6%+ in 2026

  • Legacy EBITDA*expected to turn negative after 2027, until AT&T has substantially eliminated direct costs associated with operating its copper-based network5

• Adjusted EPS*in the $2.40 range in 2026 with a double-digit 3-year CAGR through 2028

• Capital investment*in the $23 billion to $24 billion range in 2026 and in the $22 billion to $23 billion range annually in 2027 and 2028

• Free cash flow*of $18 billion+ in 2026, $19 billion+ in 2027, and $21 billion+ in 2028

• Strong capital returns, including plans to maintain its current annualized common stock dividend of $1.11 per share and $24 billion+ of share repurchases, including approximately $10 billion during 2026

Note:AT&T's third-quarter 2026 earnings conference call will be webcast at 8:30 a.m. ET on Wednesday, October 21, 2026. The webcast and related materials, including financial highlights, will be available at investors.att.com.

Detailed Third-Quarter 2026 Consolidated Financial Results

• Revenuesfor the third quarter totaled $32.3 billion, versus $30.7 billion in the year-ago quarter, up 5.3%. This was largely due to growth in Advanced Connectivity wireless service and equipment revenues, and fiber revenues, which include the impact of the Company's first-quarter acquisition of Lumen's mass markets fiber business. Operating revenues in Latin America were also higher due to favorable foreign exchange impacts and growth in postpaid revenues. Offsetting the increases were lower Legacy revenues from lower demand for services as the Company continues to decommission its copper-based network.

• Operating expenseswere $28.2 billion, versus $24.6 billion in the year-ago quarter. Operating expenses increased primarily due to a non-cash impairment charge associated with the Company's held-for-sale Mexico wireless business of $2.6 billion, employee separation charges, increased wireless equipment costs, as well as higher advertising and higher bad debt expenses driven by subscriber growth. The increase was also due to incremental customer costs related to the acquired mass markets fiber business. These increases were partially offset by cost reductions from transformation initiatives and apportioned legal settlements in the prior-year period. Depreciation expense was also lower year over year from fully depreciated legacy assets, partially offset by ongoing capital spending for strategic initiatives.

• Operating incomewas $4.1 billion, versus $6.1 billion in the year-ago quarter. Adjusted operating income* was $7.6 billion, versus $6.6 billion in the year-ago quarter.

• Income from continuing operationswas $1.3 billion, versus $9.7 billion in the year-ago quarter.

• Income from continuing operations attributable to common stockwas $0.9 billion, versus $9.3 billion in the year-ago quarter. Earnings per diluted common share from continuing operations was $0.13, versus $1.29 in the year-ago quarter, which included a gain recognized on the sale of the DIRECTV investment. Adjusting for $0.52, which includes a non-cash impairment charge associated with the held-for-sale Mexico wireless business, employee separation charges, and other items, adjusted earnings per diluted common share* was $0.65, versus $0.54 in the year-ago quarter.

• Adjusted EBITDA*was $12.5 billion, versus $11.9 billion in the year-ago quarter.

• Cash from operating activitiesfrom continuing operations was $10.5 billion, versus $10.2 billion in the year-ago quarter, which included voluntary pension plan contributions. The increase also reflects timing of working capital payments.

• Capital expendituresrelated to continuing operations were $5.1 billion, versus $4.9 billion in the year-ago quarter. Capital investment*totaled $5.6 billion, versus $5.3 billion in the year-ago quarter. Cash payments for vendor financing totaled $0.5 billion, versus $0.4 billion in the year-ago quarter.

• Free cash flow*was $5.0 billion, versus $4.9 billion in the year-ago quarter.

• Total debtwas $159.6 billion at the end of the third quarter and net debt* was $149.8 billion, both reflecting a sequential increase related to the closing of the EchoStar spectrum transaction.

AT&T Third-Quarter 2026 Segment Results 6

Advanced Connectivity service revenues grew 6.1% year over year, driving growth in operating income of 18.9% and EBITDA* of 7.3%. Internet net adds were 769,000 – comprised of 442,000 fiber and 327,000 fixed wireless – and postpaid phone net adds were 379,000.

Advanced Connectivity segment revenuesgrew 7.2% year over year, driven by service revenuegrowth of 6.1% and higher equipment revenue. Wireless service revenue increased due to growth in retail wireless subscribers in underpenetrated categories and converged accounts, and pricing actions that were partially offset by promotional discounts on wireless subscriber additions. Advanced home internet revenue growth, which included an impact from the acquired mass markets fiber business that closed in the first quarter, reflects increases in fiber and AT&T Internet Air revenues. Business fiber and advanced connectivity revenues increased largely due to higher fiber and fixed wireless revenues. Business transitional and other revenues decreased due to lower demand for virtual private network and wholesale services.

Operating expenseswere up 3.6% year over year, due to increased wireless equipment costs, higher advertising expense, incremental customer costs related to the acquired mass markets fiber business, and higher bad debt expenses driven by subscriber growth. These increases were partially offset by cost reductions from transformation initiatives. Additionally, depreciation expense decreased year over year from fully depreciated legacy assets, partially offset by ongoing capital spending for strategic initiatives.

Operating incomewas $7.6 billion, up 18.9% year over year. EBITDA*was $12.3 billion, up $837 million year over year.

Legacy revenues continued to decline year over year in line with AT&T's goal to decommission the large majority of its copper-based network by the end of 2029.

Legacy segment revenueswere down 24.5% year over year, primarily due to lower demand for services as the Company continues to decommission its copper-based network. Operating expenses, which represent direct operating costs, were $1.0 billion, down 23.5% year over year. Expense declines were primarily driven by lower personnel and other costs resulting from the decommissioning of the copper-based network, and lower fulfillment cost amortization, partially offset by favorable vendor settlements in the prior-year period. Operating incomeand EBITDA*were $498 million, down $181 million year over year.

On October 13, 2026, AT&T entered into an agreement to sell its Mexico wireless business, which is the entirety of the Latin America segment. AT&T applied held-for-sale accounting in continuing operations as of September 30, 2026, and recorded a non-cash impairment charge of $2.6 billion at Corporate and Other that did not impact third-quarter segment results. AT&T will continue to present results within the Latin America segment.

Latin America segment revenueswere up 13.2% year over year, primarily driven by favorable foreign exchange rates and postpaid wireless subscriber growth. Operating expenseswere up 11.4% year over year due to unfavorable foreign exchange rates, higher bad debt expenses, and higher equipment costs. Operating incomewas $45 million, up $23 million year over year. EBITDA* was $236 million, up $37 million year over year.

About AT&T
We help more than 100 million U.S. families, friends and neighbors, plus nearly 2.5 million businesses, connect to greater possibility. From the first phone call 150 years ago to our 5G wireless and multi-gig internet offerings today, we @ATT innovate to improve lives. For more information about AT&T Inc. (NYSE:T), please visit us at about.att.com. Investors can learn more at investors.att.com.

Cautionary Language Concerning Forward-Looking Statements
Information set forth in this news release contains financial estimates and other forward-looking statements that are subject to risks and uncertainties, and actual results might differ materially. A discussion of factors that may affect future results is contained in AT&T's filings with the Securities and Exchange Commission. AT&T disclaims any obligation to update and revise statements contained in this news release based on new information or otherwise.

Non-GAAP Measures and Reconciliations to GAAP Measures
Schedules and reconciliations of non-GAAP financial measures cited in this document to the most comparable financial measures under generally accepted accounting principles (GAAP) can be found at investors.att.com and in our Form 8-K dated October 21, 2026. Adjusted EPS, adjusted operating income, EBITDA, EBITDA margin, adjusted EBITDA, free cash flow, and net debt are non-GAAP financial measures frequently used by investors and credit rating agencies. The information below refers only to AT&T's continuing operations and does not include discussion of balances or activity related to discontinued operations.

Adjusted EPSis calculated by excluding from operating revenues, operating expenses, other income (expenses) and income tax expense, certain significant items that are non-operational or non-recurring in nature, including dispositions and merger integration and transaction costs, actuarial gains and losses, significant abandonments and impairments, benefit-related gains and losses, employee separation and other material gains and losses. Non-operational items arising from asset acquisitions and dispositions include the amortization of intangible assets. While the expense associated with the amortization of certain wireless licenses and customer lists is excluded, the revenue of the acquired companies is reflected in the measure and those assets contribute to revenue generation. We also adjust for net actuarial gains or losses associated with our pension and postemployment benefit plans due to the often-significant impact on our results (we immediately recognize this gain or loss in the income statement, pursuant to our accounting policy for the recognition of actuarial gains and losses). Consequently, our adjusted results reflect an expected return on plan assets rather than the actual return on plan assets, as included in the GAAP measure of income. The tax impact of adjusting items is calculated using the adjusted effective tax rate during the quarter except for adjustments that, given their magnitude, can drive a change in the effective tax rate; in these cases, we use the actual tax expense or combined marginal rate of approximately 25%.

For 3Q26, adjusted EPS of $0.65 is diluted EPS from continuing operations of $0.13 adjusted for $0.41 impairment charge associated with the held-for-sale Mexico wireless business, $0.09 employee separation charges, and $0.02 for benefit-related, transaction, legal and other items. For 3Q25, adjusted EPS of $0.54 is diluted EPS of $1.29 minus $0.79 gain on the sale of the DIRECTV investment, plus $0.04 benefit-related, transaction, legal and other items. Transaction, legal and other costs include certain legal reserves and settlements that cover extended historical periods, novel theories of liability, and/or are unpredictable in both magnitude and timing, and therefore are distinct and separate from normal, recurring legal matters. Such costs are presented net of expected insurance recoveries.

The Company expects adjustments to 2026 reported diluted EPS from continuing operations to include acquisition-related amortization of approximately $0.3 billion (based on preliminary information), a non-cash mark-to-market benefit plan gain/loss and other items. The Company expects the mark-to-market adjustment, which is driven by interest rates and investment returns that are not reasonably estimable at this time, to be a significant item. AT&T's projected adjusted EPS depends on future levels of revenues and expenses, most of which are not reasonably estimable at this time. Accordingly, the Company cannot provide a reconciliation between this projected non-GAAP metric and the most comparable GAAP metric without unreasonable effort.

Adjusted operating incomeis operating income adjusted for revenues and costs the Company considers non-operational in nature, including items arising from asset acquisitions or dispositions. For 3Q26, adjusted operating income of $7.6 billion is calculated as operating income of $4.1 billion, plus adjustments of $3.5 billion, which includes the impairment charge associated with the held-for-sale Mexico wireless business. For 3Q25, adjusted operating income of $6.6 billion is calculated as operating income of $6.1 billion, plus $435 million of adjustments. Adjustments for all periods are detailed in the Discussion and Reconciliation of Non-GAAP Measures included in our Form 8-K dated October 21, 2026, and include transaction, legal, and other costs as discussed above.

EBITDAis income from continuing operations plus income tax, interest, and depreciation and amortization expenses minus equity in net income (loss) of affiliates and other income (expense) – net. Adjusted EBITDAis calculated by excluding from EBITDA certain significant items that are non-operational or non-recurring in nature, including dispositions and merger integration and transaction costs, significant abandonments and impairments, benefit-related gains and losses, employee separation, and other material gains and losses. Adjustments include transaction, legal, and other costs as discussed above.

For 3Q26, adjusted EBITDA of $12.5 billion is calculated as income from continuing operations of $1.3 billion, plus income tax expense of $1.4 billion, plus interest expense of $2.0 billion, plus equity in net income (loss) of affiliates of $(10) million, minus other income (expense) – net of $0.6 billion, plus depreciation and amortization of $5.0 billion, plus adjustments of $3.4 billion, which includes the impairment charge associated with the held-for-sale Mexico wireless business. For 3Q25, adjusted EBITDA of $11.9 billion is calculated as income from continuing operations of $9.7 billion, plus income tax expense of $1.0 billion, plus interest expense of $1.7 billion, plus equity in net income (loss) of affiliates of $(20) million, minus other income (expense) – net of $6.3 billion, plus depreciation and amortization of $5.3 billion, plus adjustments of $425 million. Adjustments for all periods are detailed in the Discussion and Reconciliation of Non-GAAP Measures included in our Form 8-K dated October 21, 2026.

At the segment level, EBITDAis operating income before depreciation and amortization. EBITDA marginis EBITDA divided by total revenues. For 3Q26, Advanced Connectivity EBITDA of $12.3 billion is operating income of $7.6 billion plus depreciation and amortization of $4.7 billion. For 3Q25, Advanced Connectivity EBITDA of $11.5 billion is operating income of $6.4 billion plus depreciation and amortization of $5.1 billion.

Adjusted EBITDA, Advanced Connectivity EBITDA, and Legacy EBITDA estimates depend on future levels of revenues and expenses which are not reasonably estimable at this time. Accordingly, we cannot provide reconciliations between these projected non-GAAP metrics and the most comparable GAAP metrics without unreasonable effort.

Free cash flowfor 3Q26of $5.0 billion is cash from operating activities from continuing operations of $10.5 billion, minus capital expenditures of $5.1 billion and cash paid for vendor financing of $0.5 billion. For 3Q25, free cash flow of $4.9 billion is cash from operating activities of $10.2 billion, minus capital expenditures of $4.9 billion and cash paid for vendor financing of $0.4 billion. Due to high variability and difficulty in predicting items that impact cash from operating activities, capital expenditures and vendor financing payments, the Company is not able to provide a reconciliation between projected free cash flow and the most comparable GAAP metric without unreasonable effort.

Capital investmentprovides a comprehensive view of cash used to invest in our networks, product developments, and support systems. In connection with capital improvements, we have favorable payment terms of 120 days or more with certain vendors, referred to as vendor financing, which are excluded from capital expenditures and reported as financing activities. Capital investment includes capital expenditures and cash paid for vendor financing ($0.5 billion in 3Q26, $0.4 billion in 3Q25). Due to high variability and difficulty in predicting items that impact capital expenditures and vendor financing payments, the Company is not able to provide a reconciliation between projected capital investment and the most comparable GAAP metric without unreasonable effort.

Net debtof $149.8 billion at September 30, 2026, is calculated as total debt (debt maturing within one year and long-term debt) of $159.6 billion, plus debt classified as held-for-sale related to the Mexico wireless business of $1.2 billion, less cash and cash equivalents of $10.8 billion and time deposits (i.e., deposits at financial institutions that are greater than 90 days) of $0.3 billion. Net debt-to-adjusted EBITDA is calculated by dividing net debt by the sum of the most recent four quarters of adjusted EBITDA. Net debt and adjusted EBITDA estimates depend on future levels of revenues, expenses and other metrics which are not reasonably estimable at this time. Accordingly, we cannot provide a reconciliation between projected net debt-to-adjusted EBITDA and the most comparable GAAP metrics and related ratios without unreasonable effort.

Discussion and Reconciliation of Non-GAAP Measures

We believe the following measures are relevant and useful information to investors as they are part of AT&T's internal management reporting and planning processes and are important metrics that management uses to evaluate the operating performance of AT&T and its segments. Management also uses these measures as a method of comparing performance with that of many of our competitors. These measures should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with U.S. generally accepted accounting principles (GAAP).

On February 2, 2026, we closed our transaction with Lumen Technologies, Inc. (Lumen) and acquired substantially all of Lumen's Mass Markets fiber business. The acquisition included customer relationships, which we include with our advanced home internet services, and fiber network assets that were placed in a wholly owned subsidiary, Forged Fiber 37 Services, LLC (Forged Fiber). Upon acquisition, we initially sought an equity partner to co-invest in Forged Fiber and have since agreed to sell a controlling interest in the business. As such, Forged Fiber met the criteria of held-for-sale and accordingly is reflected as discontinued operations in the accompanying financial statements. The information below refers only to our continuing operations and does not include discussion of balances or activity of Forged Fiber.

Free Cash Flow

Free cash flow is defined as cash from operations minus cash flows related to our DIRECTV equity investment that was sold in July 2025, minus capital expenditures and cash paid for vendor financing (classified as financing activities). Free cash flow after dividends is defined as cash from operations minus cash flows related to our DIRECTV equity investment, capital expenditures, cash paid for vendor financing and dividends on common and preferred shares. Free cash flow dividend payout ratio is defined as the percentage of dividends paid on common and preferred shares to free cash flow. We believe these metrics provide useful information to our investors because management views free cash flow as an important indicator of how much cash is generated by routine business operations, including capital expenditures and vendor financing, and makes decisions based on it. Management also views free cash flow as a measure of cash available to pay debt and return cash to shareowners.

Cash Paid for Capital Investment

In connection with capital improvements, we negotiate with some of our vendors to obtain favorable payment terms of 120 days or more, referred to as vendor financing, which are excluded from capital expenditures and reported in accordance with GAAP as financing activities. We present an additional view of cash paid for capital investment to provide investors with a comprehensive view of cash used to invest in our networks, product developments and support systems.

EBITDA

Our calculation of EBITDA, as presented, may differ from similarly titled measures reported by other companies. For AT&T, EBITDA excludes other income (expense) – net, and equity in net income (loss) of affiliates, as these do not reflect the operating results of our subscriber base or operations that are not under our control. Equity in net income (loss) of affiliates represents the proportionate share of the net income (loss) of affiliates in which we exercise significant influence, but do not control. Because we do not control these entities, management excludes these results when evaluating the performance of our primary operations. EBITDA also excludes interest expense and the provision for income taxes. Excluding these items eliminates the expenses associated with our capital and tax structures. Finally, EBITDA excludes depreciation and amortization in order to eliminate the impact of capital investments. EBITDA does not give effect to cash used for debt service requirements and thus does not reflect available funds for distributions, reinvestment or other discretionary uses. EBITDA is not presented as an alternative measure of operating results or cash flows from operations, as determined in accordance with GAAP.

These measures are used by management as a gauge of our success in acquiring, retaining and servicing subscribers because we believe these measures reflect AT&T's ability to generate and grow subscriber revenues while providing a high level of customer service in a cost-effective manner. Management also uses these measures as a method of comparing cash generation potential with that of many of its competitors. The financial and operating metrics which affect EBITDA include the key revenue and expense drivers for which management is responsible and upon which we evaluate performance.

There are material limitations to using these non-GAAP financial measures. EBITDA and EBITDA margin, as we have defined them, may not be comparable to similarly titled measures reported by other companies. Furthermore, these performance measures do not take into account certain significant items, including depreciation and amortization, interest expense, tax expense and equity in net income (loss) of affiliates. For market comparability, management analyzes performance measures that are similar in nature to EBITDA as we present it, and considering the economic effect of the excluded expense items independently as well as in connection with its analysis of net income as calculated in accordance with GAAP. EBITDA and EBITDA margin should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP.

Adjusting Items

Adjusting items include revenues and costs we consider non-operational in nature, including items arising from asset acquisitions or dispositions, including the amortization of intangible assets. While the expense associated with the amortization of certain wireless licenses and customer lists is excluded, the revenue of the acquired companies is reflected in the measure and that those assets contribute to revenue generation. We also adjust for net actuarial gains or losses associated with our pension and postemployment benefit plans due to the often-significant impact on our results (we immediately recognize this gain or loss in the income statement, pursuant to our accounting policy for the recognition of actuarial gains and losses). Consequently, our adjusted results reflect an expected return on plan assets rather than the actual return on plan assets, as included in the GAAP measure of income.

The tax impact of adjusting items is calculated using the adjusted effective tax rate during the quarter except for adjustments that, given their magnitude, can drive a change in the effective tax rate, in these cases we use the actual tax expense or combined marginal rate of approximately 25%.

Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted EBITDA, Adjusted EBITDA margin and Adjusted diluted EPS are non-GAAP financial measures calculated by excluding from operating revenues, operating expenses, other income (expense) and income tax expense, certain significant items that are non-operational or non-recurring in nature, including dispositions and merger integration and transaction costs, actuarial gains and losses, significant abandonments and impairments, benefit-related gains and losses, employee separation and other material gains and losses. Management believes that these measures provide relevant and useful information to investors and other users of our financial data in evaluating the effectiveness of our operations and underlying business trends.

Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted EBITDA, Adjusted EBITDA margin and Adjusted diluted EPS should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP. AT&T's calculation of Adjusted items, as presented, may differ from similarly titled measures reported by other companies.

Net Debt to Adjusted EBITDA

Net Debt to EBITDA ratios are non-GAAP financial measures frequently used by investors and credit rating agencies and management believes these measures provide relevant and useful information to investors and other users of our financial data. Our Net Debt to Adjusted EBITDA ratio is calculated by dividing the Net Debt by the sum of the most recent four quarters Adjusted EBITDA. Net Debt is calculated by adding debt classified as held-for-sale related to our Mexico wireless business and subtracting cash and cash equivalents and deposits at financial institutions that are greater than 90 days (e.g., certificates of deposit and time deposits), from the sum of debt maturing within one year and long-term debt.

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