AI Takeaway
AT&T delivered Q2 FY2026 revenue of $31.56B (+2.3% YoY) and operating income of $7.04B (+8.3% YoY), driven by strong Advanced Connectivity segment growth (fiber, wireless, AT&T Internet Air) and margin expansion, partially offset by continued declines in the Legacy segment and equity losses tied to the DIRECTV divestiture.
Revenue
$31.56B
++2.30% YoY
EPS (Basic)
$0.66
++6.45% YoY
Operating Income
$7.04B
++8.26% YoY
Filed · Source: SEC EDGAR 10-Q filing
AT&T (T) reported Q2 FY2026 revenue of $31.56B, up 2.3% year over year. The company posted net income of $4.63B, up 2.8% from a year earlier, with diluted EPS of $0.66.
Total Advanced Connectivity segment revenue rose 4.1% YoY to $28.615B in Q2, with operating income up 20.3% to $7.345B and operating margin expanding from 22.2% to 25.7%. Growth was led by Advanced home internet revenue (+27.3% YoY to $2.926B) and wireless service revenue (+3.3% YoY to $17.413B), including impacts from the Lumen mass markets fiber acquisition.
Source: 10-Q Item 2 MD&A, Advanced Connectivity Segment
Legacy segment revenue fell 25.9% YoY to $1.632B in Q2 as the company continues decommissioning its copper-based network; operating income fell 45.5% to $523M and operating margin declined from 43.6% to 32.0%, a trend management expects to continue.
Source: 10-Q Item 2 MD&A, Legacy Segment
On February 2, 2026, AT&T closed its acquisition of substantially all of Lumen's Mass Markets fiber business, placing acquired fiber assets into Forged Fiber 37 Services, LLC, which management intends to partially divest to an equity co-investment partner; as a result, Forged Fiber is classified as held-for-sale and reported as discontinued operations, excluded from continuing operations results.
Source: 10-Q Item 2 MD&A, Consolidated Results
AT&T agreed on August 25, 2025 to purchase FCC licenses in the 600 MHz and 3.45 GHz bands from EchoStar Corporation for approximately $23.0B, expected to close by end of July 2026, funded via cash on hand and term loan borrowings; the company has kept cash balances elevated in anticipation of this closing.
Source: 10-Q Item 2 MD&A, Liquidity and Capital Resources
Equity in net income (loss) of affiliates swung from $485M income to a $(29)M loss in Q2, primarily due to the July 2, 2025 sale of AT&T's interest in DIRECTV Entertainment Holdings, LLC to TPG Capital, removing a prior income contributor.
Source: 10-Q Item 2 MD&A, Consolidated Results
Legacy segment revenue declined 25.9% YoY in Q2 to $1.632B and operating income fell 45.5% to $523M as copper-based demand continues to shrink; management explicitly expects this decline to continue as decommissioning proceeds.
Source: 10-Q Item 2 MD&A, Legacy Segment
AT&T has committed to a roughly $23.0B EchoStar spectrum purchase expected to close by end of July 2026, funded with cash and new term loan borrowings, which increases leverage and integration/financing risk against a debt ratio already at 52.8% (vs. 51.7% a year ago).
Source: 10-Q Item 2 MD&A, Liquidity and Capital Resources
Total debt grew to $143.954B from $136.100B at year-end 2025, and interest expense increased 13.8% YoY in Q2 to $1.883B due to higher debt balances and rates, with $9.323B of long-term debt maturing within one year, pressuring future cash flow.
Source: 10-Q Item 2 MD&A, Liquidity and Capital Resources
Latin America operating income margin fell from 4.4% to 3.1% in Q2 as total Mexico wireless net additions were negative 668 thousand, driven by a sharp prepaid subscriber decline of 1,006 thousand, alongside unfavorable FX-driven cost increases.
Source: 10-Q Item 2 MD&A, Latin America Segment
On May 6, 2026 the Eighth Circuit vacated the FCC's digital discrimination rules, requiring the FCC to adopt new rules consistent with the statute, creating ongoing regulatory uncertainty for broadband access obligations.
Source: 10-Q Item 2 MD&A, Competitive and Regulatory Environment
Reported EPS of $0.65 versus the $0.60 analyst consensus — a +8.4% beat for Q2 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $31.56B | $30.85B | +2.30% |
Operating Income | $7.04B | $6.5B | +8.26% |
Net Income | $4.63B | $4.5B | +2.82% |
EPS (Basic) | $0.66 | $0.62 | +6.45% |
EPS (Diluted) | $0.66 | $0.62 | +6.45% |
SG&A Expense | $7.22B | $6.95B | +3.97% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $428.36B | $405.49B | +5.64% |
Current Assets | $51.83B | $39.31B | +31.87% |
Current Liabilities | $53.38B | $48.56B | +9.92% |
Cash & Equivalents | $17.57B | $10.5B | +67.35% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Share BuybacksYTD | $4.67B | $1.18B | +296.01% |
D&A | $4.97B | $5.25B | -5.43% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Margin | 22.3% | 21.1% | +1.23% |
Net Margin | 14.7% | — | — |
ROA | 1.1% | — | — |
Current Ratio | $0.971 | — | — |
Expected release date, analyst estimates & what to watch
AT&T reported Q1 FY2026 revenue of $31.5B (+2.9% YoY) with operating income surging 15.7% to $6.7B, though net income declined 12.0% to $3.8B, likely due to higher below-the-line costs, while the company aggressively ramped share buybacks to $2.5B.
AT&T delivered a strong FY2025, with net income doubling to $21.95B and operating income surging 26.8% to $24.16B on modest 2.7% revenue growth of $125.65B, driven by improved margins and disciplined cost management.
Other companies in Integrated Telecommunication Services
The filing does not disclose analyst consensus estimates, so a definitive 'beat' cannot be confirmed from this data. However, AT&T reported revenue of $31.558B (+2.3% YoY) and diluted EPS of $0.66 (+6.5% YoY), both showing year-over-year growth.
Total revenue grew 2.3% YoY to $31.558B, driven primarily by the Advanced Connectivity segment (+4.1% to $28.615B), including 27.3% growth in Advanced home internet revenue and 3.3% growth in wireless service revenue, partially offset by a 25.9% decline in Legacy segment revenue.
Key takeaways include operating income growth of 8.3% YoY to $7.038B, Advanced Connectivity operating margin expansion to 25.7% from 22.2%, and the closing of the Lumen mass markets fiber acquisition, whose assets were placed into Forged Fiber and classified as held-for-sale/discontinued operations.
AT&T's MD&A flagged continued Legacy segment revenue decline (-25.9% YoY), rising interest expense (+13.8% YoY to $1.883B) amid higher debt levels ($143.954B total debt), and the pending ~$23.0B EchoStar spectrum acquisition expected to close by end of July 2026, funded with cash and new term loans.
AT&T held $17.570B in cash and equivalents at quarter-end, generated $18.396B in operating cash flow over the first six months, and maintained a current ratio of about 0.97, while its debt ratio rose to 52.8% from 51.7% a year earlier as it prepares for the EchoStar spectrum purchase.