AT&T NYSE: T reported first-quarter 2026 results it said were consistent with its outlook, as the company highlighted continued momentum in fiber and fixed wireless growth, rising adoption of bundled wireless and home internet, and early progress integrating assets acquired from Lumen.
Fiber and fixed wireless net adds hit a first-quarter record
Chairman and CEO John Stankey said AT&T delivered “our best ever first quarter result” for advanced internet customer growth, reporting 584,000 total fiber and fixed wireless advanced internet customer net additions. The company also posted its sixth consecutive quarter with more than 500,000 consumer and business net adds, according to Stankey.
Chief Financial Officer Pascal Desroches added that advanced home internet net adds were 512,000, excluding the 1.1 million fiber customers acquired from Lumen in early February. The 512,000 net adds included 273,000 fiber net adds and 239,000 Internet Air net adds.
AT&T also emphasized higher “convergence,” or the share of advanced home internet customers that also buy AT&T wireless service. Stankey said 42% of advanced home internet customers also choose AT&T wireless, and that excluding the Lumen transaction the convergence rate “approached 45%” on an organic basis in the quarter, more than 3 percentage points higher than last year.
Stankey tied the strategy to customer retention and value, saying converged customers show “stronger brand love, higher net promoter scores, and ultimately stay with us longer.” In the Q&A, he called churn “just math” over time and said churn should improve as more customers are converged, even as the industry goes through a “reordering” that can produce elevated churn in the near term.
Lumen integration and network expansion plans
AT&T said it closed its transaction with Lumen ahead of schedule, adding 1.1 million fiber customers and more than 4 million fiber locations. Stankey said the company has already brought fiber services throughout its distribution channels in the acquired metro areas, driving sales activity “well above pre-transaction trends,” and is scaling engineering, construction, and service delivery.
Desroches said the acquired Lumen geographies contributed two months of revenue in the quarter and added about 650 basis points to AT&T’s year-over-year advanced home internet service revenue growth rate. He also reiterated that AT&T expects an “immaterial EBITDA contribution this year” from the acquired operating regions as the company increases spending to “stand up a business” positioned for faster fiber and wireless growth.
Looking ahead, Desroches said AT&T expects fiber reach to grow by about 8 million locations in 2026, including over 4 million locations acquired from Lumen. Stankey reiterated longer-term plans to reach more than 60 million fiber locations by the end of the decade, up from more than 37 million today. He also said AT&T reaches more than 90 million customer locations with advanced internet services over fiber or 5G.
New offers and an emphasis on “network first” value
AT&T highlighted several product and experience initiatives in the quarter. Stankey pointed to an expanded AT&T Guarantee, a new flagship app intended to simplify the digital customer experience, the launch of AT&T OneConnect, and refreshed Unlimited Your Way plans.
Stankey described OneConnect as “the industry’s first ever single subscription service for fiber and wireless with a flat monthly price,” and said the company is rolling it out iteratively. In response to UBS, he said the initial focus aligns with the increasing “BYOD” (bring-your-own-device) segment, and that AT&T expects additional plan variants over the course of the year. He said the goal is to use the simplicity of connecting multiple devices to increase loyalty and reduce churn, while also requiring fiber broadband to reinforce the company’s convergence strategy.
In another exchange, Stankey said AT&T’s wireless portfolio is “over-indexed on device” and that the company intends to gradually balance the mix toward service value. He said OneConnect is a “foundational capability” that can be iterated on over coming quarters, rather than a “throwing a switch” moment away from device subsidies.
Financial results and 2026 outlook reiterated
Desroches said total revenue rose 2.9% year-over-year in the first quarter, with service revenue up 1.4%. Adjusted EBITDA increased 2.3%, though adjusted EBITDA margin fell 30 basis points to 37.4%. He noted that first-quarter 2025 results included approximately $100 million of adjusted EBITDA benefit tied to vendor settlement resolutions.
Free cash flow was $2.5 billion, “at the high end” of AT&T’s $2.0 billion to $2.5 billion first-quarter outlook. Desroches said free cash flow declined by roughly $600 million from last year, driven primarily by higher capital investment of $5.1 billion as AT&T accelerates fiber deployment. The company guided to second-quarter free cash flow of $4.0 billion to $4.5 billion and reiterated expectations for $18 billion-plus in full-year free cash flow.
Adjusted EPS was $0.57, up nearly 12%, and AT&T reiterated full-year adjusted EPS guidance of $2.25 to $2.35. Desroches also reiterated expectations for low single-digit consolidated service revenue growth and 3% to 4% consolidated adjusted EBITDA growth for the full year.
Under the company’s new segment reporting, Desroches said more than 90% of consolidated revenue and nearly all adjusted EBITDA comes from the Advanced Connectivity segment. In that segment, service revenues rose 3.6% year-over-year. Wireless service revenues grew 1.7%, and AT&T reported 294,000 postpaid phone net additions; postpaid phone ARPU was flat year-over-year. Desroches said AT&T expects wireless service revenue growth to improve in the second quarter and maintained its full-year 2% to 3% growth outlook, citing new plans, convergence, and pricing actions that begin taking effect in April.
Advanced home internet service revenues grew 27.3% year-over-year, boosted by the Lumen contribution. AT&T also cited growth in business fiber and Advanced Connectivity service revenues, which rose 7.2% year-over-year. Desroches said total Advanced Connectivity business service revenues were essentially flat year-over-year “for the first time ever,” as improved fiber and 5G gains offset declines in “transitional services such as VPN.” He said AT&T expects business service revenues in the segment to remain stable near-term and grow at a low single-digit CAGR through 2028.
Cost actions, copper retirement, leverage, and capital returns
Desroches said AT&T is progressing toward a target of $4 billion in annual cost savings by the end of 2028, citing workforce optimization, vendor rationalization, AI enablement, accelerated digitalization, and reductions in legacy operations and support costs. He said the company expects improved adjusted EBITDA growth in the second quarter as comparisons normalize, service revenue growth improves, and cost actions continue.
On legacy operations, Desroches said legacy service revenues declined about 25% year-over-year, consistent with the company’s outlook for a 20% or greater decline in 2026. He said AT&T stopped taking new orders for legacy services last year in most of its wireline footprint and has approval to discontinue legacy services in more than 30% of its wire centers. Stankey said AT&T expects more activity “in the next couple of months” following what he described as a strong FCC order providing a roadmap for copper shutdowns.
AT&T ended the quarter with net debt to adjusted EBITDA of 2.71 times, up from 2.53 times in the fourth quarter, primarily due to the Lumen transaction. Desroches said AT&T expects leverage to increase to approximately 3.2 times following its planned transaction with EchoStar, then decline to about three times by the end of 2026 and return to its target range of around 2.5 times within roughly three years after that transaction. He said AT&T ended the quarter with $12 billion in cash and $19 billion available under term loans, and reiterated expectations to close an equity investor transaction for the acquired Lumen fiber assets in the second half of the year.
AT&T returned $4.3 billion to shareholders in the quarter through dividends and share repurchases. Desroches reiterated plans to repurchase about $8 billion of stock in 2026 and to maintain a consistent pace of buybacks through 2028 as the company targets returning $45 billion-plus to shareholders over that period.
In the Q&A, Stankey also discussed how acquiring EchoStar spectrum could improve network performance and customer perception in certain markets, support capital efficiency versus other capacity expansion approaches, and expand Internet Air penetration. He said AT&T has already put a large portion of the leased spectrum into service and is seeing shifts in “network perception” in the markets where it is deployed.
Stankey also addressed satellite and direct-to-device connectivity, saying he expects “always-on connectivity” to emerge in the U.S. over the next 12 to 24 months and that AT&T is positioned to integrate satellite capabilities with its existing network and customer relationships. He said AT&T is working closely with AST SpaceMobile and anticipates other constellations will develop direct-to-device capabilities over time.
About AT&T NYSE: T
AT&T Inc is a global telecommunications company that provides a broad range of communications and digital entertainment services. Its core activities include consumer and business wireless services, broadband and fiber internet, and network infrastructure. The company operates branded wireless services through AT&T Mobility and deploys fixed-line and fiber networks to deliver high-speed internet and related home services.
AT&T's product and service portfolio spans mobile voice and data plans, smartphones and device sales, home internet (including fiber-to-the-home where available), and managed connectivity solutions for enterprise customers.
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