AT&T Q3 2025 Results: Analyzing the $9.3B Profit Turnaround

AT&T, the telecommunications titan, recently released its financial results for the third quarter of 2025. In this post, we'll dive into the numbers from its latest 10-Q filing with the SEC to see how the company is performing. The report reveals a story of impressive profit recovery, solid growth in its core wireless and fiber businesses, and continued pressure on its legacy wireline services.

A Stunning Profit Reversal

For the third quarter ended September 30, 2025, AT&T reported total operating revenues of $30.7 billion, a modest 1.6% increase from the $30.2 billion in the same period last year. This growth was fueled by higher equipment sales, suggesting healthy demand for new devices.

The most dramatic figure, however, is the bottom line. AT&T posted a net income attributable to the company of $9.3 billion. This represents a massive turnaround from a net loss of $174 million in Q3 2024. What drove this change? Two key factors stand out:

1. Absence of Impairment Charges: In Q3 2024, the company recorded over $4.4 billion in asset impairment and restructuring charges. These charges were absent in the same quarter of 2025, providing a significant boost to operating income.
2. A Surge in Other Income: A line item called "Other income (expense) — net" jumped from $717 million in Q3 2024 to a staggering $6.3 billion in Q3 2025, playing a major role in the profit surge.

What exactly is "Other income (expense) — net"? This line on the income statement captures gains and losses from activities outside a company's main business operations. This can include gains from selling assets, returns on certain investments, and adjustments related to employee benefit plans. While the 10-Q filing doesn't provide a detailed breakdown of the $6.3 billion figure, such a substantial amount is typically driven by a significant, non-recurring event like a large gain on an investment portfolio. This helps explain the dramatic year-over-year profit increase and highlights that it was driven by factors outside of day-to-day telecom services.

To better understand how revenue flows through the company's operations to become profit, the following flow diagram visualizes AT&T's income statement for the third quarter.

In the diagram, the "Unallocated" item represents revenues and costs not assigned to a specific business segment. This includes corporate administration costs, fees from its receivables securitization programs, and results from smaller, non-core businesses.

Segment Performance: A Tale of Two Tiers

AT&T's performance varies significantly across its different business units.

The Growth Engines: Mobility and Consumer Fiber

• Mobility: As AT&T's largest segment, Mobility continues to deliver. It generated $21.7 billion in revenue, up 3.1% year-over-year. The division added a solid 405,000 postpaid phone subscribers, its most valuable customer category. However, it's worth noting a slight uptick in customer churn—the rate at which subscribers leave—with postpaid phone-only churn rising to 0.92% from 0.78% a year ago.
• Consumer Wireline: This segment was another bright spot, with revenues climbing 4.1% to $3.6 billion. The growth is almost entirely due to the expansion of its fiber internet service. The company added 288,000 fiber broadband customers, bringing its total to over 10.1 million. This focus on fiber is clearly paying off, as operating income for the segment jumped an impressive 66% to $325 million.

The Challenge: Business Wireline

• Business Wireline: The segment continues to face headwinds as companies move away from traditional voice and data services. Revenue fell 7.8% to $4.2 billion, primarily driven by a 17.3% decline in legacy services. This led to the segment's operating loss widening from $43 million to $354 million.

Financial Health Check

AT&T's operational strength is reflected in its cash flow. For the first nine months of 2025, the company generated $29.0 billion in cash from its operations, an increase from $26.9 billion in the prior year. This strong cash generation supports its investments and shareholder returns.

The balance sheet shows a significant jump in cash and cash equivalents to $20.3 billion from $3.3 billion at the end of 2024. During the same period, total debt rose to $139.5 billion from $123.5 billion, reflecting over $14 billion in new debt issuances. The company also continued its share buyback program, repurchasing approximately $1.5 billion of its common stock during the third quarter.

Final Thoughts

AT&T's third-quarter results paint a picture of a company successfully navigating a major transition. The headline profit figure, while impressive, is heavily influenced by one-off items. The real story lies in the operational trends: the robust growth in 5G wireless and fiber broadband is effectively offsetting the managed decline in legacy business services. While challenges like rising churn and the shrinking wireline business persist, the company's core segments are demonstrating solid momentum and generating substantial cash, positioning AT&T to continue investing in its future.