Telecommunications conglomerate AT&T (NYSE: T) reported Q1 CY2026 results beating Wall Street’s revenue expectations, with sales up 2.9% year on year to $31.51 billion. Its non-GAAP profit of $0.57 per share was 3.4% above analysts’ consensus estimates.
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AT&T (T) Q1 CY2026 Highlights:
- Revenue: $31.51 billion vs analyst estimates of $31.22 billion (2.9% year-on-year growth, 0.9% beat)
- Adjusted EPS: $0.57 vs analyst estimates of $0.55 (3.4% beat)
- Adjusted EBITDA: $11.62 billion vs analyst estimates of $11.78 billion (36.9% margin, 1.3% miss)
- Operating Margin: 21.1%, up from 18.8% in the same quarter last year
- Market Capitalization: $181.4 billion
StockStory’s Take
AT&T’s first quarter results for 2026 were met with a negative market reaction, as higher-than-expected revenues were offset by a slight miss on profit. Management highlighted that growth was largely driven by continued expansion in fiber and fixed wireless customers, with CEO John Stankey noting, “We reported 584,000 total fiber and fixed wireless advanced Internet customer net additions. This is our best ever first quarter.” The company also closed its Lumen acquisition ahead of schedule, integrating over a million new fiber customers and expanding its advanced connectivity footprint. However, rising investment costs and the ongoing transition from legacy services weighed on overall profitability.
Looking ahead, AT&T’s management emphasized the acceleration of its fiber and 5G investment strategy, aiming for improved growth in converged customer relationships that combine wireless and home Internet services. CFO Pascal Desroches stated, “We expect improved growth in adjusted EBITDA in the second quarter as comparisons normalize, service revenue growth improves, and as we implement further cost actions.” The company outlined plans to drive additional fiber penetration, streamline legacy operations, and leverage new offerings like OneConnect to increase customer retention and lifetime value. Management remains focused on executing cost savings initiatives and scaling advanced connectivity, while also preparing for the integration of EchoStar spectrum assets and the continued retirement of copper infrastructure.
Key Insights from Management’s Remarks
Management attributed the quarter’s performance to strong customer demand for converged fiber and wireless services, alongside strategic progress in integrating recent acquisitions and rolling out new connectivity offerings.
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Fiber and fixed wireless momentum: The company saw its strongest first-quarter net additions in fiber and fixed wireless Internet, reflecting consumer demand for higher-speed, reliable connectivity. Stankey highlighted that 42% of advanced home Internet customers also chose AT&T wireless, with convergence rates climbing to 45% organically.
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Lumen acquisition integration: AT&T completed the Lumen transaction ahead of schedule, adding over 1.1 million fiber customers and expanding its fiber footprint by more than 4 million locations. Early integration has driven above-trend sales activity in newly acquired markets, with management expecting further improvement as operational scaling continues.
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Converged offerings drive retention: The company’s push to bundle wireless and Internet services under new plans like OneConnect is aimed at reducing customer churn and boosting long-term account value. Management noted that converged customers demonstrate higher loyalty and longer tenure, supporting improved operating metrics.
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Shift toward network value: AT&T is moving to emphasize service and network performance over device subsidies. Stankey explained the strategy as a “balanced portfolio” approach, using offerings like OneConnect to focus customer attention on network quality and value.
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Copper network retirement: Progress on retiring legacy copper infrastructure is expected to deliver significant cost savings and operational efficiencies. AT&T now has approval to discontinue legacy services in over 30% of its wire centers, with further milestones anticipated in coming quarters.
Drivers of Future Performance
AT&T’s forward outlook is shaped by continued investment in fiber and 5G, expanded converged offerings, and cost efficiency initiatives as key themes for revenue and margin growth.
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Fiber and wireless convergence: Management sees further upside from customers adopting both fiber home Internet and wireless services, with the OneConnect platform expected to deepen relationships and reduce churn. Stankey anticipates that as the fiber footprint grows, so will the share of bundled accounts, supporting sustainable service revenue growth.
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Cost transformation and legacy transition: Ongoing efforts to streamline operations—such as workforce optimization, increased digitalization, and copper network retirement—are central to AT&T’s margin improvement strategy. Desroches stated that cost actions and improved sales execution should drive adjusted EBITDA growth in the 3% to 4% range for the year.
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Spectrum assets and network investments: The pending integration of EchoStar spectrum is expected to enhance network capacity and performance, particularly for wireless and fixed wireless access. Management expects this to support further expansion into business and consumer markets and improve capital efficiency over time.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be monitoring (1) the pace of fiber and Internet Air adoption and whether AT&T can meaningfully increase converged account penetration; (2) progress on cost savings and copper network retirement, as these are fundamental to margin expansion; and (3) early signs of network and subscriber impact from the integration of EchoStar spectrum assets. Ongoing developments in new product offerings and competitive responses will also be important indicators of execution.
AT&T currently trades at $25.94, in line with $25.88 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).
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