The company agreed to acquire Lumen's mass markets fiber business for $5,750 million, adding approximately 1 million fiber customers and over 4 million fiber locations. This pending acquisition, alongside a 11.8% year-over-year increase in fiber broadband connections to 9,835 thousand, underscores AT&T's commitment to expanding its high-speed fiber footprint and driving future growth.

Capital expenditures for the six months ended June 30, 2025, rose to $9,174 million, up from $8,118 million in the prior year. This increased investment is primarily directed towards strategic initiatives such as fiber deployment and 5G network upgrades, which are crucial for enhancing service offerings and capturing market share in high-growth areas.

Total Mobility Subscribers grew 2.4% year-over-year to 118,245 thousand as of June 30, 2025, with postpaid subscribers increasing by 2.2%. However, postpaid churn and postpaid phone-only churn rates increased by 14 basis points year-over-year to 1.01% and 0.85% respectively, reflecting a normalization of promotional plans and heightened competition.

AT&T's consolidated operating income margin increased to 21.1% in Q2 2025 from 19.3% in Q2 2024, and to 19.9% for the first six months of 2025 from 19.4% in 2024. This expansion indicates effective management of overall expenses, partially offsetting increased Mobility equipment and network-related costs through ongoing transformation efforts.

The Consumer Wireline segment's operating income surged 82.1% in Q2 2025 to $335 million and 72.3% for the first six months to $684 million. Its operating income margin dramatically improved to 9.5% in Q2 2025 from 5.5% in Q2 2024, reflecting strong broadband revenue growth and effective cost management within the segment.

The Business Wireline segment reported an operating loss of $(201) million in Q2 2025, compared to an operating income of $102 million in Q2 2024. This decline is primarily due to lower demand for legacy services and the absence of revenues from the cybersecurity business contributed to LevelBlue, highlighting ongoing challenges in this segment.

The company explicitly states a risk that it may not realize or sustain the expected benefits from its business transformation initiatives, which are designed to reduce costs and improve operations. Failure to successfully manage and execute these initiatives could materially adversely affect financial goals and competitive position.

AT&T acknowledges risks associated with its increasing use of AI-driven efficiencies, including the potential for models to produce incorrect output, release private information, reflect biases, infringe intellectual property rights, or cause other harm. These risks could expose the company to liability, adverse legal/regulatory consequences, and reputational damage.

The company continues to face risks from an increasingly competitive industry, including competitors with lower cost structures or government-subsidized networks. Additionally, evolving U.S. and foreign laws and regulations regarding data privacy, spectrum, and net neutrality pose ongoing compliance challenges and potential impacts on operations and cash flow.

Fiber broadband connections increased by 11.8% year-over-year to 9,835 thousand as of June 30, 2025, driving a 10.0% increase in broadband revenues. This indicates AT&T's strong competitive advantage in the high-speed internet market, leveraging its fiber network investments to attract and retain customers, despite overall declines in copper-based services.

Postpaid churn and postpaid phone-only churn rates increased by 14 basis points year-over-year for the six months ended June 30, 2025, primarily due to the normalization of customers reaching the end of their equipment promotional plans and increased competition. This suggests a more challenging environment for customer retention in the wireless market.

Business Wireline revenues decreased by 9.2% for the six months ended June 30, 2025, largely due to lower demand for legacy and VPN services. This ongoing trend highlights the need for continued strategic shifts and investments in advanced services to offset the erosion of traditional revenue streams in a competitive and evolving market.

Operations and support expenses increased by 1.8% for the six months ended June 30, 2025, primarily due to higher Mobility equipment costs, network-related costs, and advertising. However, these increases were partially offset by expense declines resulting from ongoing transformation efforts and the contribution of the cybersecurity business to a new joint venture, indicating some success in cost optimization.

AT&T actively manages supplier payments, seeking 90-day or greater terms and utilizing direct supplier financing arrangements. While direct supplier financing outstanding was $4,235 million at June 30, 2025, vendor financing payments decreased to $423 million for the six months ended June 30, 2025, from $1,391 million in the prior year, demonstrating efforts to optimize cash flow and working capital.

Depreciation and amortization expense increased by 3.2% for the six months ended June 30, 2025, to $10,441 million. This rise is primarily due to ongoing capital spending for strategic initiatives such as fiber and network upgrades, indicating continued investment in modernizing and expanding the network infrastructure, which is essential for long-term operational capabilities.

Capital expenditures increased to $9,174 million for the first six months of 2025, with the vast majority spent on network upgrades, including fiber deployment and 5G wireless network expansion. This significant investment highlights AT&T's commitment to enhancing its core technological capabilities and delivering multi-gig services to customers.

AT&T is using and intends to further use artificial intelligence (AI)-driven efficiencies in various areas, including network design and operations, software development, sales, marketing, customer support services, and general and administrative costs. This strategic adoption of AI aims to streamline processes and improve overall productivity.

While overall depreciation expense increased due to capital spending, the company noted that lower depreciation impacts from its Open RAN network modernization efforts partially offset this increase. This suggests progress in adopting more flexible and cost-efficient network architectures.

The company repurchased approximately 34 million shares totaling $958 million for the six months ended June 30, 2025, under its $10,000 million common stock repurchase authorization. With $9,042 million remaining under the authorization, this aggressive repurchase activity indicates management's belief in the company's intrinsic value and commitment to shareholder returns.

Total debt increased to $132,311 million at June 30, 2025, from $123,532 million at December 31, 2024. For the six months ended June 30, 2025, AT&T issued $6,429 million in long-term debt while repaying $1,620 million. The debt ratio slightly increased to 51.7% from 50.7%, reflecting active management of the capital structure to support investments.

Dividends paid on common and preferred shares remained stable at $4,135 million for the first six months of 2025, consistent with $4,133 million in the prior year. This consistency reflects the company's commitment to its dividend policy, balancing shareholder returns with capital funding requirements and long-term growth opportunities.

AT&T intends to voluntarily contribute approximately $1,500 million to its pension plan by the end of 2026, with more than half of that in 2025, despite having no significant funding requirements for the year. This proactive approach demonstrates a commitment to securing long-term benefits for employees and managing post-retirement obligations effectively.

The Chief Executive Officer and Chief Financial Officer concluded that the registrant's disclosure controls and procedures were effective as of June 30, 2025. This indicates a strong internal governance framework for financial reporting and compliance, contributing to transparency and investor confidence.

The company reported $38 million in FirstNet sustainability payments, net of reinvestment, for the six months ended June 30, 2025. This ongoing investment underscores AT&T's commitment to its public safety network, which aligns with social responsibility initiatives by supporting critical communications infrastructure.

The 'One Big Beautiful Bill Act,' enacted on July 4, 2025, restores or makes permanent certain expiring business tax provisions. While AT&T does not anticipate a material impact on income tax expense, it expects a material positive impact on cash taxes paid relative to prior expectations, which could enhance future liquidity.

The company highlights risks from rapidly evolving U.S. and foreign laws and regulations concerning intellectual property rights, privacy, personal data protection, and user consent. Compliance with these regulations may affect operations and cash flow, necessitating continuous adaptation and investment in regulatory response.

AT&T identifies adverse economic and political changes, the imposition of tariffs, and geopolitical risks such as wars or terrorist attacks as factors that could materially affect future results. These broad external factors introduce uncertainty into the operating environment and could impact consumer and business spending.