So here's the story of AT&T Inc. (T) right now: it's building the future while slowly turning off the past. The telecom giant reported its first-quarter 2026 results on Wednesday, and the numbers paint a pretty clear picture of that transition.
Revenue came in at $31.51 billion, which is up 2.9% from a year ago and a bit better than what analysts were expecting. Adjusted earnings per share were 57 cents, also beating the consensus. The growth engine? What AT&T calls "Advanced Connectivity"—basically, its modern wireless and fiber internet services. That segment got a nice boost from customers added through the Lumen fiber deal, which contributed for two months in the quarter. Revenue in Mexico also helped, thanks to favorable currency moves.
But then there's the drag. The company's legacy services—think old-school copper phone lines—are still in decline. As AT&T keeps phasing out that copper network, revenue in that part of the business fell, partially offsetting the gains from the shiny new stuff. It's the classic corporate pivot: the new business is growing, but not quite fast enough yet to make you forget the old one is shrinking.
On the customer front, AT&T added more wireless subscribers than analysts predicted. The secret sauce seems to be bundles—offering discounts when you combine wireless service with high-speed fiber internet. To stay competitive in a tough market, AT&T, like its rival T-Mobile US, Inc. (TMUS), kept offering subsidies on the latest Apple Inc. (AAPL) iPhones. In a clever pricing move, Reuters reported the company also tweaked its wireless plans: it raised prices on the cheapest and most expensive tiers while lowering them in the middle. The idea isn't to start a price war, but to gently nudge customers toward those mid-range plans.
Breaking Down the Business
Earlier this year, AT&T started reporting its results in three new segments, which makes it easier to see what's working and what's not.
Revenue in the Advanced Connectivity segment—the company's biggest—grew 4.7%. The Legacy segment? That revenue plunged 25.3%. Meanwhile, the Latin America segment saw revenue jump 20.8%, helped by those foreign exchange tailwinds.
Digging into the subscriber numbers: AT&T added 584,000 new high-speed internet customers. About half of those were on its fiber network, and the other half were using its wireless home internet service. For consumer internet specifically, net adds were 512,000, split between 273,000 fiber customers and 239,000 internet air (wireless) customers.
On the wireless side, postpaid phone net additions were 294,000. That's down from 324,000 a year ago, but it still beat analyst expectations. The not-so-great news is that customer attrition, or churn, ticked up. Postpaid phone churn rose to 0.89% from 0.83%, and prepaid churn increased to 2.62% from 2.55%. On a brighter note, the company said 42% of households that get AT&T fiber also sign up for its wireless service, showing the power of that bundle.
The Financial Scorecard
Adjusted EBITDA, a measure of operating profitability, improved to $11.8 billion from $11.5 billion a year ago. But net income actually fell to $3.8 billion, down from $4.4 billion.
Here's where you see the cost of building that future: operating cash flow dropped to $7.6 billion from $9.0 billion. That resulted in free cash flow of $2.5 billion, down from $3.1 billion. Why the dip? The company is spending heavily on capital projects—$4.9 billion in the quarter—as it accelerates the rollout of its fiber network. Building stuff is expensive.
What's Next? The Multi-Year Plan
AT&T didn't change its multi-year outlook, which is a sign of confidence (or at least a commitment to the story it's been telling).
For 2026 through 2028, the company still expects low-single-digit annual growth in service revenue. It reaffirmed adjusted EBITDA growth of 3% to 4% for 2026, with a goal of hitting 5% or better by 2028. The idea is that by then, growth in Advanced Connectivity will more than make up for the declines in Legacy.
For 2026, adjusted EPS is still forecast between $2.25 and $2.35, and the company is targeting a double-digit compound annual growth rate for EPS through 2028.
The spending plan is aggressive and unchanged: annual capital investment of $23 billion to $24 billion from 2026 through 2028. Despite that spend, free cash flow is projected to grow: $18 billion or more in 2026, $19 billion or more in 2027, and $21 billion or more in 2028.
Drilling down, AT&T expects its Advanced Connectivity service revenue to grow in the mid-single digits each year, including more than 5% growth in 2026. EBITDA for that segment is projected to grow in the mid-to-high single digits annually, with more than 6% growth this year. On the flip side, Legacy service revenue is still forecast to fall by over 20% in 2026.
The fiber build-out is the physical manifestation of this strategy. AT&T has expanded its fiber network to over 37 million locations and expects to pass 40 million by the end of this year. The long-term goal? To exceed 60 million locations by 2030.
Returning Cash to Shareholders
For investors, the capital return plan is a big part of the story. AT&T reiterated its commitment to return more than $45 billion to shareholders from 2026 to 2028 through dividends and share buybacks.
That includes maintaining its current annualized dividend of $1.11 per share and buying back about $8 billion worth of its stock.
In early trading Wednesday, AT&T shares were down about 2.2%.
