AT&T reported second-quarter 2026 earnings on Tuesday that beat analyst expectations, delivering adjusted earnings per share of $0.65 versus the consensus estimate of $0.59, as strong growth in wireless and fiber subscribers drove profitability gains. Revenue totaled $31.6 billion, up 2.3% year-over-year, though slightly below the $31.8 billion forecast, signaling that margin expansion and cash generation now matter more to investors than top-line growth.
The telecom giant added more than 1 million Advanced Connectivity customers in the quarter, its best second quarter for fiber net additions. The company added 646,000 internet subscribers, split between 367,000 fiber and 279,000 fixed wireless customers, while also gaining 432,000 postpaid phone subscribers. This convergence of services—where customers bundle fiber, wireless, and other offerings—is central to AT&T’s growth strategy and delivered what executives called record combined fiber and fixed wireless net adds.
Adjusted EBITDA climbed 5.2% to $12.3 billion, with the margin expanding to 39.1%, the highest consolidated adjusted EBITDA margin since AT&T refocused its business on advanced connectivity. Free cash flow rose to $4.7 billion, up $300 million from the year-ago quarter, underscoring the company’s ability to convert revenue growth into cash. The stock rose 5% in premarket trading, as investors rewarded the earnings beat and strong cash generation despite the modest revenue miss.
AT&T accelerated its capital return plans, raising its 2026 share repurchase target to approximately $10 billion from an earlier $8 billion plan. Chief Executive John Stankey said the move reflects confidence in the company’s market position and what he views as a gap between the company’s operating fundamentals and its stock valuation. Total shareholder returns, including dividends, are now expected to reach about $18 billion for the year.
The quarter showcased AT&T’s fiber-led strategy. The company now reaches 38.6 million fiber locations and remains on track to exceed 40 million by year-end, making 2026 its largest-ever fiber expansion year. Fiber revenues grew as the company integrated its February acquisition of Lumen’s mass-market fiber business and accelerated branded rollout. Advanced Connectivity service revenue, which now accounts for over 90% of AT&T’s service revenue, grew 5.1% year-over-year, with wireless service revenue up 3.3%.
Convergence rates—the share of advanced home internet customers who also hold AT&T postpaid wireless—reached 42.5% company-wide and 45% when excluding the acquired Lumen footprint. These bundled customers carry higher lifetime value and lower churn, making them a key driver of profitability. Management noted that June converged gross adds in the Lumen territories were up 45% compared to February, signaling rapid integration progress.
AT&T’s strong Q2 execution contrasts with a broader telecom industry facing modest growth. According to S&P Global, the U.S. telecom industry is expected to achieve around 3% service revenue growth in 2026, with higher churn and slowing subscriber growth a concern for carriers. AT&T’s ability to deliver over 1 million net adds across its core businesses and expand margins positions it ahead of that industry trend, driven by its fiber and wireless investments.
The company maintained its full-year 2026 guidance for adjusted EPS of $2.25 to $2.35 and free cash flow of $18 billion or more. Stankey also offered forward-looking commentary on artificial intelligence, arguing that agentic AI will reshape network traffic by 2035, requiring fiber-enabled convergence at the edge. He said AT&T is positioning itself to operate “the most advanced and technologically open communications network in the U.S.” by decade’s end, built on dense metro fiber and nationwide spectrum.
Revenue growth, while solid, remained modest at 2.3%, and the company’s ability to sustain margin gains depends on continued fiber penetration and cost transformation. Still, the Q2 results reinforced that AT&T’s investment-led strategy is delivering operating leverage and cash flow, the metrics now driving investor confidence in the telecom sector.
Sources
- AT&T Newsroom — official Q2 2026 earnings announcement with consolidated results, segment details, and full-year guidance
- PRNewswire — AT&T press release on Q2 results, subscriber net adds, and capital allocation plans
- Investing.com — earnings call transcript with CEO and CFO commentary on strategy, AI, and market positioning
- S&P Global — U.S. telecom industry 2026 outlook and service revenue growth expectations
