AT&T reported fourth-quarter adjusted earnings per share of $0.85, topping consensus estimates by $0.07, while revenue rose 3.2% year-over-year to $46.8 billion. The company added 550,000 postpaid wireless subscribers, its strongest quarterly wireless net adds in two years, and grew broadband connections by 430,000. Management attributed the outperformance to accelerating 5G adoption—now accounting for 38% of total wireless usage—and to ramped-up fiber network deployments, which reached 5.1 million locations by year-end.

AT&T’s fiber-to-the-home footprint expansion and bundling of mobile and home internet services have driven customer uptake. Convergence subscribers—households subscribing to at least two services—grew by 210,000 in the quarter, offsetting a 120,000-unit decline in legacy DSL connections. The company now serves over 14.7 million converged accounts, up 11% from a year earlier, enhancing average revenue per user (ARPU) by 4% sequentially.

Despite top-line strength, AT&T’s adjusted operating margin contracted to 22.4%, down from 23.1% a year earlier, reflecting higher costs tied to 5G site builds and promotional offers to attract fiber subscribers. Legacy voice and copper services revenue declined by 9%, exerting downward pressure on overall margin. Management expects capital expenditures of approximately $22 billion in 2026, with free cash flow projected near $14 billion, supporting the company’s dividend and debt reduction targets.

Looking ahead, AT&T projects mid-single-digit adjusted EPS growth for fiscal 2026, underpinned by continued 5G device upgrades and further fiber convergence rollouts. The balance sheet remains healthy with net leverage near 3.4x EBITDA, and the company plans to allocate excess cash toward shareholder returns and debt repayment. Investors should monitor broadband penetration trends and margin stabilization as key indicators of the sustainability of AT&T’s turnaround.