What the Company Does 📡
AT&T is a major U.S. telecommunications company focused on wireless and fiber broadband. In simple terms, it earns mostly recurring monthly subscription revenue by keeping consumers and businesses connected through mobile service and high-speed internet.
- Wireless: Mobile plans and data services (the largest business).
- Fiber & wireline: Home broadband and business network services delivered through fixed-line infrastructure.
Financial Highlights 📊
In FY 2025, AT&T’s results showed stable-to-improving performance in its core telecom operations.
- Revenue: $125,648m (up from $122,336m in FY 2024).
- Operating Income: $24,162m (up from $19,049m in FY 2024).
- Net Income attributable to AT&T: $21,953m (up from $10,948m in FY 2024).
- Diluted EPS: $3.0 (up from $1.5 in FY 2024).
The company continued to carry meaningful interest expense (the cost of debt), which management highlights as an important ongoing factor for earnings.
Key Risks ⚠️
AT&T’s disclosed risks are closely tied to the realities of running a large telecom network business.
- Competition: Intense competition in wireless and broadband can pressure pricing and customer retention.
- High network investment needs: Telecom is capital-intensive, meaning it requires large ongoing spending to build and upgrade networks.
- Debt and financing: Significant debt levels require consistent cash generation and careful refinancing over time.
- Regulation: Telecom is heavily regulated, including rules tied to spectrum and consumer protection.
- Network reliability and cybersecurity: Outages or security incidents can disrupt service and raise costs.
MD&A Highlights 🧭
Management emphasized execution in wireless and fiber, disciplined cost management, and ongoing network investment. AT&T also highlighted cash flow and liquidity as critical for funding capital spending, meeting debt obligations, and supporting shareholder returns.
- Operating cash flow remained strong in FY 2025 ($40,284m).
- Capital expenditures remained substantial ($20,842m), reflecting continued network buildout and upgrades.
- Year-end cash increased meaningfully (ending cash of $18,527m).
Takeaway ✅
AT&T’s FY 2025 10-K highlights a company that is now more focused on connectivity rather than media assets, with improving operating profitability and strong cash generation. For beginners, the core idea is simple: AT&T is built around recurring subscription revenue, but it must keep investing heavily in its network while managing debt and industry-specific risks.
Income Statement Summary 💵
| (Unit: $m, EPS in $) | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| Revenue (Sales) | 122,428 | 122,336 | 125,648 |
| Cost of Goods Sold (Cost of Revenue) | 50,123 | 49,221 | 50,820 |
| Gross Profit (Gross Profit) | 72,305 | 73,115 | 74,828 |
| SG&A (Selling, General & Administrative) | 28,874 | 28,411 | 28,942 |
| Operating Income (Operating Income) | 23,461 | 19,049 | 24,162 |
| Non-Operating Income/Expense (Non-operating items) | (3,613) | (2,351) | 2,845 |
| Interest Income/Expense (Interest expense) | (6,704) | (6,759) | (6,804) |
| Income Before Tax (Income before tax) | 19,848 | 16,698 | 27,007 |
| Income Tax (Income tax) | 4,225 | 4,445 | 3,621 |
| Net Income (Net income attributable to AT&T) | 14,400 | 10,948 | 21,953 |
| EPS (Earnings per share) | 2.0 | 1.5 | 3.0 |
Plain English
AT&T’s revenue stayed relatively stable from FY 2023 to FY 2024 and then grew in FY 2025. Operating Income improved sharply in FY 2025, which matters because it reflects the profitability of the core telecom business before interest and taxes. One key point for beginners: AT&T has meaningful interest expense every year, which is the cost of carrying debt. Even when a company’s operations improve, debt costs can still take a big bite out of earnings if interest rates stay high.
Key Financial Ratios 🧮
| Ratio | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| ROE (%) | 12.9 | 9.3 | 17.9 |
| ROA (%) | 3.6 | 2.7 | 5.4 |
| ROTC (%) | 9.2 | 7.9 | 9.2 |
| ROIC (%) | 7.4 | 5.9 | 8.6 |
| Gross Margin (%) | 59.1 | 59.8 | 59.6 |
| Operating Margin (%) | 19.2 | 15.6 | 19.2 |
| Pretax Margin (%) | 16.2 | 13.7 | 21.5 |
| Net Margin (%) | 11.8 | 9.0 | 17.5 |
| Debt-to-Equity Ratio (D/E) (%) | 116.9 | 104.5 | 107.6 |
| Net Debt / EBITDA (x) | 3.1 | 3.0 | 2.6 |
| Interest Coverage Ratio (x) | 3.5 | 2.8 | 3.6 |
| Current Ratio (%) | 71.3 | 66.5 | 90.6 |
| Quick Ratio (%) | 33.3 | 27.6 | 50.3 |
| Fixed Asset to Long-term Capital Ratio (%) | 52.4 | 54.5 | 51.9 |
Plain English
A few beginner-friendly interpretations:
- Profitability improved in FY 2025: ROE, ROA, margins, and ROIC all moved higher. ROIC (Return on Invested Capital) is especially useful because it checks whether the company is earning a solid return on the capital it uses (debt + equity), after taxes and excluding cash.
- Leverage is still high: the Debt-to-Equity ratio stayed above 100%, meaning total debt is roughly the same size as (or larger than) equity.
- Debt burden improved in FY 2025: Net Debt / EBITDA fell to 2.6x and interest coverage improved, suggesting the business generated stronger operating profit relative to debt costs.
- Liquidity strengthened in FY 2025: Current and Quick ratios increased, helped by a much higher cash balance. (Liquidity means short-term financial flexibility.)
📝 Disclaimer
This article is intended for educational purposes only. It does not constitute financial, investment, or legal advice. All investment decisions involve risks, and readers should conduct their own research or consult with a licensed financial advisor.
👉 AT&T (T) FY 2025 10-K Analysis (Filed 2026) | Explained for Beginners