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

AT&T delivers strong Q3 results, boosts 2026 outlook, and accelerates shareholder returns.

What the company is saying

AT&T highlights a record quarter for Advanced Connectivity internet net adds, with over 1 million new customers for the second consecutive quarter and 769,000 total internet net adds, including 442,000 fiber and 327,000 fixed wireless. The company frames its narrative around robust revenue growth, improved operating efficiency, and durable long-term profitability, emphasizing a 5.3% year-over-year revenue increase to $32.3 billion and adjusted EPS growth to $0.65 from $0.54. John Stankey, Chairman and CEO, positions AT&T as a leader in fiber and 5G, asserting the company's readiness for the AI era and its commitment to building the nation's strongest network. The release underscores the company's plan to reach over 40 million fiber locations by the end of 2026 and more than 60 million by 2030, while also announcing an agreement to sell its Mexico wireless business to Grupo Televisa and Fintech Holdings. AT&T signals increased 2026 adjusted EPS guidance, lower long-term capital investment, and a plan to return $45 billion+ to shareholders from 2026 to 2028 through dividends and share repurchases. The tone is confident, with detailed explanations for year-over-year changes, including the impact of a $2.6 billion non-cash impairment charge related to the Mexico wireless business and higher operating expenses from acquisitions and subscriber growth.

What the data suggests

The disclosed figures show AT&T's Q3 2026 revenues rose to $32.3 billion, up 5.3% year over year, driven by Advanced Connectivity wireless and fiber services. Adjusted EPS increased to $0.65 from $0.54, while diluted EPS fell to $0.13 due to a $2.6 billion non-cash impairment charge and employee separation costs. Adjusted EBITDA grew 5.4% to $12.5 billion, and free cash flow improved slightly to $5.0 billion. Advanced Connectivity service revenue reached $23.9 billion, up 6.1%, with operating income up 18.9% to $7.6 billion and EBITDA up 7.3% to $12.3 billion. The company added 769,000 internet customers and 379,000 postpaid phone customers, with postpaid phone churn at 0.92%. AT&T returned $4.8 billion to shareholders, including $2.8 billion in share repurchases. Total debt stands at $159.6 billion and net debt at $149.8 billion, reflecting the EchoStar spectrum transaction. The company projects adjusted EPS of around $2.40 in 2026, capital investment of $23–24 billion in 2026, and free cash flow of $18 billion+ in 2026, rising to $21 billion+ in 2028. The sale of the Mexico wireless business is agreed but not yet closed, and the company continues to decommission its legacy copper network, with legacy revenues down 24.5% year over year. The data supports the company's claims of operational momentum and improving profitability, but long-term targets such as fiber expansion to 60 million locations by 2030 remain projections.

Analysis

AT&T's announcement is generally positive and supported by strong realised financial and operational results for Q3 2026, including revenue, adjusted EPS, EBITDA, and free cash flow growth. The company discloses substantial capital expenditures and investment, with a significant portion of the narrative focused on forward-looking plans such as fiber expansion targets through 2030, increased shareholder returns, and improved long-term financial outlooks. While these projections are credible given the company's scale and recent performance, they remain unproven and are subject to execution risk, especially as some targets (e.g., 60 million fiber locations by 2030) are long-dated. The tone is optimistic, but the majority of the key claims are realised and well-supported by disclosed numbers. However, the announcement does include some inflationary language around being 'on track' for future milestones and returning $45 billion+ to shareholders, which are not yet realised. The capital intensity is high, with multi-year investment plans and only gradual, not immediate, benefit realisation. Overall, the gap between narrative and evidence is moderate, with most claims substantiated but some forward-looking optimism.

Risk flags

• ●High capital intensity remains a structural risk, with $5.6 billion in Q3 capital investment and projected annual capital outlays of $22–24 billion through 2028. Sustaining this level of investment requires ongoing strong cash generation and exposes the company to execution risk if growth targets are not met.
• ●The sale of the Mexico wireless business introduces transitional risk, as the $2.6 billion non-cash impairment charge reflects potential challenges in extracting value from non-core assets. The transaction's successful closing and subsequent operational adjustments will be critical.
• ●AT&T's long-term fiber expansion and shareholder return targets are ambitious, with plans to reach 60 million fiber locations by 2030 and return $45 billion+ to shareholders by 2028. These depend on consistent operational delivery, regulatory stability, and no major adverse shifts in competitive or macroeconomic conditions.
• ●Legacy service revenue is declining sharply (down 24.5% year over year), and legacy EBITDA is expected to turn negative after 2027. The pace of decommissioning the copper network and managing associated costs will affect future profitability.
• ●Net debt remains elevated at $149.8 billion, and while the company targets a net debt-to-adjusted EBITDA ratio in the 2.5x range by 2029, this deleveraging path is sensitive to both operating performance and capital allocation discipline.

Bottom line

AT&T's Q3 2026 results confirm continued operational and financial momentum, with revenue, adjusted EPS, and EBITDA all showing solid year-over-year growth. The company is executing on its strategy to expand fiber and 5G, with record customer additions and a clear plan for further network buildout. The sale of the Mexico wireless business and the decommissioning of legacy assets are reshaping the portfolio, but also introduce transitional and execution risks. Capital intensity remains high, and the company's ability to deliver on its multi-year shareholder return and fiber expansion goals will require sustained performance and disciplined capital management. Investors should focus on the pace of fiber rollouts, progress on deleveraging, and the realisation of projected free cash flow and EPS improvements. The most important takeaway is that while AT&T's near-term results are strong and its long-term narrative is credible, the scale of its forward commitments means execution risk remains material.

Announcement summary

(NYSE:T) AT&T Inc. reported third-quarter 2026 results, with revenues totaling $32.3 billion, up 5.3% year over year. Diluted EPS from continuing operations was $0.13, which includes a non-cash impairment charge related to the held-for-sale Mexico wireless business and employee separation charges, compared to $1.29 in the prior-year quarter. Adjusted EPS was $0.65, up from $0.54 in the year-ago quarter. Operating income was $4.1 billion, while adjusted operating income was $7.6 billion. Income from continuing operations was $1.3 billion, and adjusted EBITDA was $12.5 billion, up 5.4% year over year. Cash from operating activities from continuing operations was $10.5 billion, versus $10.2 billion in the prior-year quarter. Capital expenditures related to continuing operations were $5.1 billion, and capital investment was $5.6 billion. Free cash flow was $5.0 billion, compared to $4.9 billion in the year-ago quarter. AT&T added more than 1 million Advanced Connectivity customers for the second consecutive quarter, including 769,000 total consumer and business Advanced Connectivity internet net adds (442,000 fiber and 327,000 fixed wireless) and 379,000 postpaid phone net adds. Advanced Connectivity service revenue was $23.9 billion, up 6.1% year over year, with operating income of $7.6 billion (up 18.9%) and EBITDA of $12.3 billion (up 7.3%). 42.8% of households with AT&T's advanced home internet services also chose AT&T wireless. The company reached more than 39 million total consumer and business locations with fiber and remains on track to reach over 40 million by the end of 2026 and more than 60 million by the end of 2030. AT&T returned approximately $4.8 billion to shareholders, including $2.8 billion in common share repurchases. The company is increasing its outlook for 2026 adjusted EPS and lowering its long-term outlook for capital investment, maintaining plans to return $45 billion+ to shareholders during 2026-2028 through dividends and share repurchases. The long-term outlook for 2026-2028 includes service revenue growth in the low-single-digit range annually, Advanced Connectivity service revenue growth in the mid-single-digit range annually (expected 5%+ in 2026), legacy service revenue decline of 20%+ in 2026, adjusted EBITDA growth in the upper portion of the 3% to 4% range in 2026 (improving to 5% or better in 2028), and adjusted EPS in the $2.40 range in 2026. Capital investment is projected at $23 billion to $24 billion in 2026 and $22 billion to $23 billion annually in 2027 and 2028. Free cash flow is expected to be $18 billion+ in 2026, $19 billion+ in 2027, and $21 billion+ in 2028. The company 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. Total debt at the end of the third quarter was $159.6 billion, and net debt was $149.8 billion. 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, to Grupo Televisa and Fintech Holdings, and recorded a non-cash impairment charge of $2.6 billion. The company acquired substantially all of Lumen's Mass Markets fiber business on February 2, 2026, with the assets placed in a wholly owned subsidiary, Forged Fiber 37, classified as held-for-sale and reflected as discontinued operations. AT&T's third-quarter 2026 earnings conference call was scheduled for October 21, 2026.

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