AT&T Inc. (T) stock extended gains overnight after closing up 3.5% following second-quarter earnings that exceeded Wall Street estimates. The telecommunications company reported adjusted earnings of $0.65 per share, beating the consensus forecast of $0.59, though revenue of $31.6 billion came in just below the expected $31.8 billion. AT&T raised its 2026 share repurchase target to about $10 billion from $8 billion and generated $4.7 billion in free cash flow, exceeding its own guidance range of $4.0 billion to $4.5 billion. The company added over one million Advanced Connectivity customers during the quarter, including 646,000 consumer and business internet subscribers, 367,000 fiber customers and 279,000 fixed wireless clients, while CEO John Stankey described the results as the "best-ever second quarter for AT&T fiber net adds."
AT&T Generates $4.7 Billion Free Cash Flow in Second Quarter
AT&T generated $4.7 billion in free cash flow during the second quarter, exceeding its own guidance range of $4.0 billion to $4.5 billion and higher than the $4.4 billion in the year-ago quarter. Management reaffirmed the company's expectation for more than $18 billion in free cash flow this year. "We expect free cash flow will be relatively stable year over year in the third quarter with strong year-over-year growth in the fourth quarter," CFO Pascal Desroches said in the earnings call.
AT&T Raises 2026 Share Repurchase Target to $10 Billion
AT&T returned $4.1 billion to shareholders during the second quarter, including $2.2 billion in share repurchases. The company raised its 2026 share repurchase target to about $10 billion from $8 billion, accelerating buybacks planned through 2028, and announced plans to buy back nearly $1 billion worth of stock in July. "Together, our planned share repurchases and expected dividend payments will total approximately $18 billion this year, which is essentially 100% of our outlook for free cash flow," Desroches said, adding that the company's cash flow and liquidity can sustain the dividend and buybacks plans.
AT&T Adds Over One Million Advanced Connectivity Customers
AT&T added over one million Advanced Connectivity customers during the quarter, including 646,000 consumer and business internet subscribers, 367,000 fiber customers and 279,000 fixed wireless clients. The company also added 432,000 postpaid phone subscribers while maintaining a postpaid phone churn rate of 0.86% compared to 0.89% in the previous quarter. AT&T stated it remains on track to surpass 40 million fiber locations by the end of 2026 and 60 million by 2030. "At the end of the second quarter, 42.5% of our Advanced Home Internet customers also have a postpaid wireless account with AT&T. And this convergence rate reached 45% when excluding customers within our acquired footprint from Lumen," CEO John Stankey said on the investor call.
AT&T Positions Fiber Network for AI-Driven Connectivity Demand
AT&T stated its investment-led strategy is already driving stronger operating performance while positioning the company to meet the growing connectivity demands of AI. "Agentic adoption is projected to drive approximately 9x growth in enterprise traffic and approximately 7x growth in consumer traffic by 2035," Stankey said. "Distribution of AI inference to the edge necessitates low latency, and high bandwidth connectivity to access end points. This is why we believe fiber-enabled network convergence at the edge will create a true competitive advantage," he added, noting that the company is already witnessing rapid increases in large-scale data traffic, which require high-capacity metro and intercity fiber infrastructure. "By the end of this decade, we expect to operate the most advanced and technologically open communications network in the US, built on a foundation of dense interconnected metro fiber and deep nationwide spectrum," he said.
AT&T CEO Addresses Starlink Competition Concerns
Stankey addressed concerns about competition from SpaceX's Starlink in response to a question, reiterating that AT&T's strategy remains centered on fiber and its existing wireless network. Stankey said that while he sees fixed wireless as a useful solution for specific use cases, fiber remains the most optimal long-term technology for broadband. In a separate interview with CNBC, he said, "There are going to be new competitors, and there are going to be folks that come in. But the reality is that they're coming to the game very late after this industry has been established. They have to catch up with substantial amounts of infrastructure investment that's been going on for decades."
The stock is down about 6% so far in 2026.
FAQ
What were AT&T's second-quarter earnings results?
AT&T reported adjusted earnings of $0.65 per share, exceeding Wall Street estimates of $0.59, with revenue of $31.6 billion coming in just below the consensus forecast of $31.8 billion.
How much did AT&T raise its share repurchase target?
AT&T raised its 2026 share repurchase target to about $10 billion from $8 billion, accelerating buybacks planned through 2028, and announced plans to buy back nearly $1 billion worth of stock in July.
How many customers did AT&T add in the second quarter?
AT&T added over one million Advanced Connectivity customers, including 646,000 consumer and business internet subscribers, 367,000 fiber customers, 279,000 fixed wireless clients, and 432,000 postpaid phone subscribers.
