AT&T (T) investor relations material

Strategic priorities and integration

• Focus for 2026 is on execution, integrating recent acquisitions, and expanding the fiber footprint, with a target of 40 million fiber passings by year-end and 50 million within three years.

• Integration of Lumen assets is underway, with over 2,000 employees and 1 million customers added; efforts are concentrated on increasing penetration and convergence in these new markets.

• Expectation to close the EchoStar deal early in the year and to double the Lumen footprint over five years, supported by bringing in an equity partner by H2.

• New segment reporting will separate advanced connectivity from legacy communications, highlighting returns from fiber and 5G investments and progress in sunsetting legacy assets.

Financial outlook and growth drivers

• Q1 will reflect integration costs and lower penetration rates due to the Lumen acquisition, with EBITDA and free cash flow expected to be below full-year run rates.

• Full-year guidance includes over 30% advanced home internet revenue growth and 2%-3% wireless service revenue growth, with Q1 run rates expected to be lower.

• Growth strategy is shifting toward volume-driven expansion in both fiber and wireless, with less emphasis on ARPU growth due to convergence discounts.

• Capital allocation prioritizes dividends, buybacks, and deleveraging, with a goal to reach a 2.5x leverage ratio within three years while maintaining flexibility for strategic investments.

Market dynamics and operational efficiency

• Competitive intensity remains high in wireless and broadband, with promotional activity elevated and churn expected to stay at similar levels as last year.

• Fiber remains the primary growth engine, with fixed wireless as a complementary offering, especially in areas without fiber; fixed wireless net adds are expected to accelerate through 2027.

• Modular network architecture, scale advantages, and increased self-service connections have helped contain fiber build costs despite inflationary pressures.

• AI and digitization are driving efficiencies in support, care, and sales functions, reducing costs and employee count while improving customer experience.