filings.toolsItem 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations- Continued
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations- Continued
Dollars in millions except per share amounts
| Consumer Wireline Results | ||||||||||||||||||||||||||||||||||||||
| First Quarter | ||||||||||||||||||||||||||||||||||||||
| Percent | ||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | Change | ||||||||||||||||||||||||||||||||||||
| Operating revenues | ||||||||||||||||||||||||||||||||||||||
| Broadband | $ | 2,984 | $ | 2,722 | 9.6 | % | ||||||||||||||||||||||||||||||||
| Legacy voice and data services | 286 | 342 | (16.4) | |||||||||||||||||||||||||||||||||||
| Other service and equipment | 252 | 286 | (11.9) | |||||||||||||||||||||||||||||||||||
| Total Operating Revenues | 3,522 | 3,350 | 5.1 | |||||||||||||||||||||||||||||||||||
| Operating expenses | ||||||||||||||||||||||||||||||||||||||
| Operations and support | 2,224 | 2,256 | (1.4) | |||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 949 | 881 | 7.7 | |||||||||||||||||||||||||||||||||||
| Total Operating Expenses | 3,173 | 3,137 | 1.1 | |||||||||||||||||||||||||||||||||||
| Operating Income | $ | 349 | $ | 213 | 63.8 | % |
The following tables highlight other key measures of performance for Consumer Wireline:
| Broadband Connections | ||||||||||||||||||||||||||||||||||||||
| March 31, | Percent | |||||||||||||||||||||||||||||||||||||
| (in 000s) | 2025 | 2024 | Change | |||||||||||||||||||||||||||||||||||
| Broadband1 | 14,112 | 13,784 | 2.4 | % | ||||||||||||||||||||||||||||||||||
| Fiber Broadband Connections | 9,592 | 8,559 | 12.1 | % | ||||||||||||||||||||||||||||||||||
| 1Includes AIA. |
| Broadband Net Additions | ||||||||||||||||||||||||||||||||||||||
| First Quarter | ||||||||||||||||||||||||||||||||||||||
| Percent | ||||||||||||||||||||||||||||||||||||||
| (in 000s) | 2025 | 2024 | Change | |||||||||||||||||||||||||||||||||||
| Broadband Net Additions1,2 | 137 | 55 | — | % | ||||||||||||||||||||||||||||||||||
| Fiber Broadband Net Additions | 261 | 252 | 3.6 | % | ||||||||||||||||||||||||||||||||||
| 1Includes AIA. | ||||||||||||||||||||||||||||||||||||||
| 2First-quarter 2025 excludes the impact of subscriber disconnections resulting from the termination of AIA services in areas with unfavorable regulatory requirements. |
Broadband revenues increased in the first quarter of 2025, driven by a 19.0% increase in fiber revenues. Higher fiber revenues reflect an increase in fiber customers, which we expect to continue as we invest further in building our fiber footprint, and higher ARPU. This increase was partially offset by declines in copper-based broadband services.
Legacy voice and data services revenues decreased in the first quarter of 2025, reflecting the continued decline in demand for these services in favor of other technologies, such as wireless and fiber services.
Other service and equipment revenues decreased in the first quarter of 2025, reflecting the continued decline in the number of VoIP customers.
Operations and support expenses decreased in the first quarter of 2025. The expense decrease in the first quarter was primarily driven by lower customer support costs and network-related costs that included higher vendor settlements in 2025.
Depreciation expense increased in the first quarter of 2025, primarily due to ongoing capital spending for strategic initiatives such as fiber and network upgrades and expansion, which we expect to continue through the remainder of 2025.
AT&T INC.
MARCH 31, 2025
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations- Continued
Dollars in millions except per share amounts
Operating income increased in the first quarter of 2025. Our Consumer Wireline operating income margin in the first quarter increased from 6.4% in 2024 to 9.9% in 2025. Our Consumer Wireline EBITDA margin in the first quarter increased from 32.7% in 2024 to 36.9% in 2025.
| LATIN AMERICA SEGMENT | First Quarter | |||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | Percent Change | ||||||||||||||||||||||||||||||||||||
| Segment Operating Revenues | ||||||||||||||||||||||||||||||||||||||
| Service | $ | 615 | $ | 690 | (10.9) | % | ||||||||||||||||||||||||||||||||
| Equipment | 356 | 373 | (4.6) | |||||||||||||||||||||||||||||||||||
| Total Segment Operating Revenues | 971 | 1,063 | (8.7) | |||||||||||||||||||||||||||||||||||
| Segment Operating Expenses | ||||||||||||||||||||||||||||||||||||||
| Operations and support | 778 | 883 | (11.9) | |||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 150 | 177 | (15.3) | |||||||||||||||||||||||||||||||||||
| Total Segment Operating Expenses | 928 | 1,060 | (12.5) | |||||||||||||||||||||||||||||||||||
| Operating Income | $ | 43 | $ | 3 | — | % |
The following tables highlight other key measures of performance for Mexico:
| Subscribers | ||||||||||||||||||||||||||||||||||||||
| March 31, | Percent | |||||||||||||||||||||||||||||||||||||
| (in 000s) | 2025 | 2024 | Change | |||||||||||||||||||||||||||||||||||
| Postpaid | 5,997 | 5,352 | 12.1 | % | ||||||||||||||||||||||||||||||||||
| Prepaid | 17,376 | 16,742 | 3.8 | |||||||||||||||||||||||||||||||||||
| Reseller | 235 | 365 | (35.6) | |||||||||||||||||||||||||||||||||||
| Total Mexico Wireless Subscribers | 23,608 | 22,459 | 5.1 | % | ||||||||||||||||||||||||||||||||||
| Mexico Wireless Net Additions | ||||||||||||||||||||||||||||||||||||||
| First Quarter | ||||||||||||||||||||||||||||||||||||||
| Percent | ||||||||||||||||||||||||||||||||||||||
| (in 000s) | 2025 | 2024 | Change | |||||||||||||||||||||||||||||||||||
| Postpaid | 160 | 116 | 37.9 | % | ||||||||||||||||||||||||||||||||||
| Prepaid | (110) | 79 | — | |||||||||||||||||||||||||||||||||||
| Reseller | (18) | (52) | 65.4 | |||||||||||||||||||||||||||||||||||
| Total Mexico Wireless Net Additions | 32 | 143 | (77.6) | % |
Service revenues decreased in the first quarter of 2025, reflecting unfavorable foreign exchange impacts, partially offset by growth in subscribers and ARPU.
Equipment revenues decreased in the first quarter of 2025, reflecting unfavorable foreign exchange impacts, partially offset by higher equipment sales.
Operations and support expenses decreased in the first quarter of 2025, primarily due to favorable foreign exchange impacts, partially offset by increased equipment and selling costs resulting from higher sales.
Depreciation and amortization expense decreased in the first quarter of 2025, primarily due to favorable foreign exchange impacts.
AT&T INC.
MARCH 31, 2025
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations- Continued
Dollars in millions except per share amounts
Operating income improved in the first quarter of 2025. Our Mexico operating income margin in the first quarter increased from 0.3% in 2024 to 4.4% in 2025. Our Mexico EBITDA margin in the first quarter increased from 16.9% in 2024 to 19.9% in 2025.
COMPETITIVE AND REGULATORY ENVIRONMENT
Overview AT&T subsidiaries operating within the United States are subject to federal and state regulations. AT&T subsidiaries operating outside the United States are subject to the jurisdiction of national and supranational regulations in the markets where service is provided. Complying with these regulations may affect our results of operations and cash flow, and compliance may be very costly. For a discussion of these regulations, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operation—Regulatory Landscape” in our Annual Report on Form 10-K for the year-ended December 31, 2024.
LIQUIDITY AND CAPITAL RESOURCES
| For three months ended March 31, | 2025 | 2024 | |||||||||
| Cash provided by operating activities | $ | 9,049 | $ | 7,547 | |||||||
| Cash used in investing activities | (4,958) | (2,961) | |||||||||
| Cash used in financing activities | (553) | (7,815) | |||||||||
| March 31, | December 31, | ||||||||||
| 2025 | 2024 | ||||||||||
| Cash and cash equivalents | $ | 6,885 | $ | 3,298 | |||||||
| Total debt | 126,161 | 123,532 |
We had $6,885 in cash and cash equivalents available at March 31, 2025, increasing $3,587 since December 31, 2024. Cash and cash equivalents included cash of $1,122 and money market funds and other cash equivalents of $5,763. Approximately $1,159 of our cash and cash equivalents were held in accounts outside of the U.S. and may be subject to restrictions on repatriation.
For the first three months of 2025, cash inflows were primarily provided by cash receipts from operations, including cash from our sale and transfer of our receivables to third parties, and distributions from DIRECTV. These inflows exceeded cash used to meet the needs of the business, including, but not limited to, payment of operating expenses, including higher device payments from higher sales volumes. The cash generated from operating activities was primarily used to repay long-term debt, make dividend payments to stockholders and to fund capital improvements. We maintain availability under our credit facilities and our commercial paper program to meet our short-term liquidity requirements.
Cash Provided by Operating Activities
During the first three months of 2025, cash provided by operating activities was $9,049, compared to $7,547 for the first three months of 2024, with increases resulting from higher cash flows related to DIRECTV, including a first-quarter 2025 dividend of $1,138, and operational growth.
We actively manage the timing of our supplier payments for operating items to optimize the use of our cash. Among other things, we seek to make payments on 90-day or greater terms, while providing the suppliers with access to bank facilities that permit earlier payments at their cost (referred to as supplier financing program). In addition, for payments to suppliers of handset inventory, as part of our working capital initiatives, we have arrangements that allow us to extend the stated payment terms by up to 90 days at an additional cost to us (referred to as direct supplier financing). The net impact of direct supplier financing, including principal and interest payments, was to decrease cash from operating activities approximately $2,042 and $1,584 for the three months ended March 31, 2025 and 2024, respectively. All supplier financing payments are due within one year. (See Note 10)
AT&T INC.
MARCH 31, 2025
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations- Continued
Dollars in millions except per share amounts
Cash Used in Investing Activities
For the first three months of 2025, cash used in investing activities totaled $4,958 and consisted primarily of $4,277 (including interest during construction) for capital expenditures. During the first three months of 2025, investing activities also included $95 of FirstNet sustainability payments net of reinvestment, and approximately $560 for our investment in a new strategic partner related to wireline network transformation accounted for under the equity method of accounting.
We enter into multi-year software licensing arrangements, which are typically paid over the license terms of two to five years and referred to as vendor financing. Additionally, for capital improvements, we have negotiated favorable vendor payment terms of 120 days or more with some of our vendors, which are also referred to as vendor financing. Vendor financing is excluded from capital expenditures and reported as financing activities. For the first three months of 2025, vendor financing payments were $203, compared to $841 for the first three months of 2024. Capital expenditures for the first three months of 2025 were $4,277, and when including $203 cash paid for vendor financing, capital investment was $4,480 ($119 lower than the prior-year comparable period).
The vast majority of our capital expenditures are spent on our networks, including product development and related support systems. During the first three months of 2025, we placed $378 of productive assets (primarily software) in service under vendor financing arrangements (compared to $99 in the prior-year comparable period). The amount of capital expenditures is influenced by demand for services and products, capacity needs and network enhancements.
Cash Provided by or Used in Financing Activities
For the first three months of 2025, cash used in financing activities totaled $553 and was primarily comprised of debt repayments, dividend payments, preferred stock repurchase and vendor financing payments, offset by issuances of long-term debt and preferred interests.
A tabular summary of our debt activities for the three months ended March 31, 2025 is as follows:
| Three months ended March 31, 2025 | ||||||||||||||
| Issuance of Notes and Debentures: | ||||||||||||||
| EUR notes | 2,956 | |||||||||||||
| Debt Issuances | $ | 2,956 | ||||||||||||
| Repayments | ||||||||||||||
| EUR notes | 1,321 | |||||||||||||
| Other | 205 | |||||||||||||
| Repayments of long-term debt | $ | 1,526 |
The weighted average interest rate of our long-term debt portfolio, including credit agreement borrowings and the impact of derivatives, was approximately 4.2% as of March 31, 2025 and as of December 31, 2024. We had $124,790 of total notes and debentures outstanding at March 31, 2025. This also included Euro, British pound sterling, Canadian dollar, Swiss franc and Australian dollar denominated debt that totaled approximately $33,474.
At March 31, 2025, we had $8,902 of long-term debt maturing within one year. We had no outstanding commercial paper or other short-term borrowings on March 31, 2025.
For the first three months of 2025, we paid $203 of cash under our vendor financing program, compared to $841 in the prior-year comparable period. Total vendor financing payables included in our March 31, 2025 consolidated balance sheet were $1,694, with $1,078 due within one year (in “Accounts payable and accrued liabilities”) and the remainder predominantly due within five years (in “Other noncurrent liabilities”).
At March 31, 2025, we had approximately $10,000 remaining from our common stock repurchase authorization approved by the Board of Directors in December 2024.
We paid dividends on common and preferred shares of $2,091 during the first three months of 2025, compared with $2,034 for the first three months of 2024.
AT&T INC.
MARCH 31, 2025
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations- Continued
Dollars in millions except per share amounts
Dividends on common stock declared by our Board of Directors totaled $0.2775 per share in the first three months of 2025 and 2024. Our dividend policy considers the expectations and requirements of stockholders, capital funding requirements of AT&T and long-term growth opportunities.
Financing activities in the first three months of 2025 also included the issuance of $2,250 of nonconvertible cumulative preferred interests in Telco LLC, with the funds used to redeem all outstanding Series B preferred stock for $2,075 (see Note 11). We also received approximately $850 in upfront cash proceeds from a structured sale-leaseback of real estate.
Credit Facilities
The following summary of our various credit and loan agreements does not purport to be complete and is qualified in its entirety by reference to each agreement filed as exhibits to our Annual Report on Form 10-K.
We use credit facilities as a tool in managing our liquidity status. We currently have one $12,000 revolving credit agreement that terminates on November 18, 2029 (Revolving Credit Agreement). No amount was outstanding under the Revolving Credit Agreement as of March 31, 2025.
We also utilize other external financing sources, which include various credit arrangements supported by government agencies to support network equipment purchases as well as a commercial paper program.
Our Revolving Credit Agreement contains covenants that are customary for an issuer with investment grade senior debt credit rating as well as a net debt-to-EBITDA financial ratio covenant requiring AT&T to maintain, as of the last day of each fiscal quarter, a ratio of not more than 3.75-to-1. As of March 31, 2025, we were in compliance with the covenants for our credit facilities.
Collateral Arrangements
Most of our counterparty collateral arrangements require cash collateral posting by AT&T only when derivative market values exceed certain thresholds. Under these arrangements, which cover the majority of our approximate $36,532 derivative portfolio, counterparties are still required to post collateral. During the first three months of 2025, we posted $8 of cash collateral, on a net basis. Cash postings under these arrangements vary with changes in credit ratings and netting agreements. (See Note 7)
Other
Our total capital consists of debt (long-term debt and debt maturing within one year), redeemable noncontrolling interest and stockholders’ equity. Our capital structure does not include debt issued by our equity method investments. At March 31, 2025, our debt ratio was 50.9%, compared to 52.4% at March 31, 2024 and 50.7% at December 31, 2024. The debt ratio is affected by the same factors that affect total capital, and reflects our recent debt issuances, repayments and reclassifications related to redemption of noncontrolling interests.
AT&T INC.
MARCH 31, 2025
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations- Continued
Dollars in millions except per share amounts
DISCUSSION AND RECONCILIATION OF NON-GAAP MEASURES
We also evaluate segment and business unit performance based on EBITDA, which is defined as operating income excluding depreciation and amortization, and/or EBITDA margin, which is defined as EBITDA divided by total revenue. EBITDA is used as part of our management reporting, and we believe EBITDA to be a relevant and useful measurement to our investors as it measures the cash generation potential of our business units. EBITDA does not give effect to depreciation and amortization expenses incurred in operating income nor is it burdened by cash used for debt service requirements and thus does not reflect available funds for distributions, reinvestment or other discretionary uses. There are material limitations to using these non-GAAP financial measures. EBITDA and EBITDA margin, as we have defined them, may not be comparable to similarly titled measures reported by other companies.
| First Quarter | |||||||||||||||||||||||||||||||||||
| Percent | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | Change | |||||||||||||||||||||||||||||||||
| Communications Segment | |||||||||||||||||||||||||||||||||||
| Operating income | $ | 6,991 | $ | 6,745 | 3.6 | % | |||||||||||||||||||||||||||||
| Add: Depreciation and amortization expense | 4,973 | 4,730 | 5.1 | ||||||||||||||||||||||||||||||||
| EBITDA | $ | 11,964 | $ | 11,475 | 4.3 | % | |||||||||||||||||||||||||||||
| Operating income margin | 23.7 | % | 23.4 | % | |||||||||||||||||||||||||||||||
| EBITDA margin | 40.5 | % | 39.8 | % | |||||||||||||||||||||||||||||||
| Mobility | |||||||||||||||||||||||||||||||||||
| Operating income | $ | 6,740 | $ | 6,468 | 4.2 | % | |||||||||||||||||||||||||||||
| Add: Depreciation and amortization expense | 2,526 | 2,487 | 1.6 | ||||||||||||||||||||||||||||||||
| EBITDA | $ | 9,266 | $ | 8,955 | 3.5 | % | |||||||||||||||||||||||||||||
| Operating income margin | 31.2 | % | 31.4 | % | |||||||||||||||||||||||||||||||
| EBITDA margin | 43.0 | % | 43.5 | % | |||||||||||||||||||||||||||||||
| Business Wireline | |||||||||||||||||||||||||||||||||||
| Operating income (loss) | $ | (98) | $ | 64 | — | % | |||||||||||||||||||||||||||||
| Add: Depreciation and amortization expense | 1,498 | 1,362 | 10.0 | ||||||||||||||||||||||||||||||||
| EBITDA | $ | 1,400 | $ | 1,426 | (1.8) | % | |||||||||||||||||||||||||||||
| Operating income margin | (2.2) | % | 1.3 | % | |||||||||||||||||||||||||||||||
| EBITDA margin | 31.3 | % | 29.0 | % | |||||||||||||||||||||||||||||||
| Consumer Wireline | |||||||||||||||||||||||||||||||||||
| Operating income | $ | 349 | $ | 213 | 63.8 | % | |||||||||||||||||||||||||||||
| Add: Depreciation and amortization expense | 949 | 881 | 7.7 | ||||||||||||||||||||||||||||||||
| EBITDA | $ | 1,298 | $ | 1,094 | 18.6 | % | |||||||||||||||||||||||||||||
| Operating income margin | 9.9 | % | 6.4 | % | |||||||||||||||||||||||||||||||
| EBITDA margin | 36.9 | % | 32.7 | % | |||||||||||||||||||||||||||||||
| Latin America Segment | |||||||||||||||||||||||||||||||||||
| Operating income | $ | 43 | $ | 3 | — | % | |||||||||||||||||||||||||||||
| Add: Depreciation and amortization expense | 150 | 177 | (15.3) | ||||||||||||||||||||||||||||||||
| EBITDA | $ | 193 | $ | 180 | 7.2 | % | |||||||||||||||||||||||||||||
| Operating income margin | 4.4 | % | 0.3 | % | |||||||||||||||||||||||||||||||
| EBITDA margin | 19.9 | % | 16.9 | % |
AT&T INC.
MARCH 31, 2025
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