Timing note: The event date is Wednesday, July 22, 2026—which is today, not tomorrow. AT&T is scheduled to report second-quarter results before the U.S. market opens.
AT&T enters 2Q26 with a relatively clear operating plan: grow wireless and broadband together, accelerate fiber deployment, take cost out of the legacy copper footprint, and convert that progress into free cash flow while continuing dividends and buybacks.
The key question for investors is whether the company is now demonstrating the second-quarter acceleration management explicitly promised after 1Q. In particular, the report needs to validate three claims:
A clean report is likely one that supports those three pillars while holding the full-year framework intact. A headline EPS beat without cash-flow delivery, or strong subscriber additions achieved through materially higher promotional intensity, would be less convincing.
AT&T reported a solid 1Q26, but it also set a high bar for the June quarter:
| Metric | 1Q26 actual | What management indicated for 2Q26 / 2026 |
|---|---|---|
| Adjusted EPS | $0.57 | Reiterated $2.25–$2.35 for FY26 |
| Revenue | $31.5B, +2.9% YoY | Low-single-digit service-revenue growth for FY26 |
| Adjusted EBITDA | $11.8B, +2.3% YoY | Expected growth to improve in 2Q; FY26 growth 3%–4% |
| Free cash flow | $2.5B | $4.0B–$4.5B in 2Q; $18B+ for FY26 |
| Capital investment | $5.1B | $23B–$24B for FY26 |
| Net debt | $126.4B at March 31 | Leverage expected to rise with the EchoStar transaction before declining thereafter |
The most important hard benchmark is therefore free cash flow. At the midpoint of management’s 2Q outlook, AT&T would generate roughly $4.25 billion of FCF—well above 1Q’s $2.5 billion and broadly consistent with the normal seasonal improvement after first-quarter incentive compensation and device-payment headwinds.
In 1Q, AT&T added 294,000 postpaid phone subscribers, reported 0.89% postpaid-phone churn, and grew wireless service revenue 1.7% year over year. Management said that growth should improve in 2Q, supported by pricing actions that began taking effect in April and further adoption of its converged offers.
The issue is not simply gross adds. Investors should focus on whether AT&T can improve service revenue while keeping acquisition and retention costs disciplined.
Key read-throughs: - Wireless service-revenue growth moving decisively above 1Q’s 1.7%. - Postpaid phone net additions that remain healthy without a material deterioration in churn. - Evidence that customer growth is increasingly composed of converged fiber/wireless or fixed-wireless/wireless accounts. - Commentary on promotional intensity, handset subsidies, and the economics of its newer OneConnect offers.
AT&T’s strategic case rests on the view that converged customers churn less and have better lifetime value. That is a credible long-term thesis, but the near-term trade-off is that the company may accept some ARPU dilution and elevated commercial spending to build those relationships. Investors will want proof that these trade-offs are still economically attractive.
Broadband is the company’s most important growth engine. In 1Q, AT&T delivered 512,000 consumer advanced-home-internet net adds, including 273,000 fiber and 239,000 Internet Air additions. It also closed the Lumen Mass Markets fiber acquisition in February, bringing roughly 1.1 million fiber customers and more than 4 million fiber locations into the AT&T ecosystem.
The second quarter should provide a more meaningful look at integration progress.
What matters most: - Fiber net additions and whether trends improve sequentially, consistent with normal seasonal patterns and expanded reach. - Internet Air additions and whether AT&T continues using fixed wireless selectively—as a stand-alone value product and as a future fiber-conversion funnel. - Sales momentum in acquired Lumen markets, where management previously said activity was running above pre-transaction levels. - Any change in management’s expectation that the Lumen operating regions will make only an immaterial EBITDA contribution in 2026, owing to integration and growth investments. - Progress toward a transaction with an outside equity partner for the acquired fiber-network assets, which management expects in the second half of 2026.
Comparability deserves special attention. AT&T reorganized reporting into Advanced Connectivity, Legacy, and Latin America beginning in 1Q26. The Lumen customer acquisition and related held-for-sale/discontinued-operations treatment for certain network assets also make simple year-over-year comparisons less informative than underlying service-revenue growth, net adds, and EBITDA trajectory.
AT&T’s new Advanced Connectivity segment now represents more than 90% of consolidated revenue and nearly all adjusted EBITDA. In 1Q, the segment produced:
That margin performance is encouraging, particularly given low-margin equipment growth and the initially modest profitability of acquired Lumen operations. The 2Q report should show whether that operating leverage is sustainable.
The main offset is Legacy: 1Q Legacy revenue declined 25.3% and EBITDA declined 39.9% as AT&T shuts down copper-based services. This is strategically positive over time, but the near-term profit drag can remain disproportionate until infrastructure and support costs are fully removed.
Investors should look for: - Advanced Connectivity EBITDA growth consistent with the company’s 6%+ FY26 target. - Tangible evidence of the broader $4B annual cost-savings target by year-end 2028. - Updates on copper retirement, wire-center shutdowns, and the timing of cost removal. - Whether business advanced-connectivity revenue can remain stable to modestly positive, offsetting declines in transitional services.
The report is also a capital-allocation check. AT&T reiterated plans for:
At the same time, investors must weigh those returns against elevated investment and transaction-related leverage. Net debt stood at $126.4B at the end of 1Q, and management expects net debt-to-adjusted EBITDA to rise to about 3.2x following the EchoStar transaction before trending down.
The quarter therefore needs to reinforce that AT&T can fund fiber builds, spectrum-related commitments, dividends, buybacks, and deleveraging from internally generated cash flow—not merely from favorable timing or balance-sheet flexibility.
AT&T shares closed at $22.27 on July 21, up from $20.70 on June 30, but the stock has recently traded amid renewed investor concern that SpaceX and other satellite operators could become more consequential competitors in wireless and broadband.
This is unlikely to change 2Q operating results. But it can influence the call and the stock’s reaction to an otherwise in-line report.
Management’s prior position has been that satellite direct-to-device connectivity will be complementary to terrestrial networks, especially for coverage gaps, while fiber retains a structural advantage in cost and performance for high-capacity home broadband. The more immediate investor question is whether new satellite partnerships, direct-to-device offerings, or a broader low-earth-orbit ecosystem could alter long-run industry pricing, customer-acquisition costs, or the perceived value of AT&T’s fixed and mobile network assets.
A confident, technically grounded response on this topic—without any indication of incremental competitive pressure in the core business—would be helpful for sentiment.
AT&T’s 2Q26 report is primarily a proof-of-acceleration quarter. The company has already articulated the framework: stronger wireless service revenue, better EBITDA growth, roughly $4 billion to $4.5 billion of quarterly free cash flow, and ongoing progress in fiber-led convergence.
The highest-value indicators will be FCF delivery, wireless service-revenue acceleration, fiber/Lumen execution, and the quality—not just the quantity—of subscriber growth. If those align, investors should gain confidence that AT&T can simultaneously fund its network expansion and meet its substantial capital-return commitments. If not, the market is likely to refocus on the cost of competition, integration execution, and leverage.