AT&T Inc. 5.35% GLB NTS 66 Q2 2025 Company News Update#
AT&T Inc. 5.35% GLB NTS 66 (Ticker: TBB has demonstrated a nuanced balance between aggressive growth initiatives and disciplined financial management in Q2 2025. The company’s strategic focus on fiber expansion and 5G deployment is shaping its current and future financial profile amid a competitive and evolving telecom landscape.
Financial Performance and Market Position#
The latest data shows [TBB] trading at $22.58, up +0.85% from the previous close, with a market capitalization of approximately $201.91 billion. The trailing twelve months (TTM) price-to-earnings (P/E) ratio stands at 13.98x, reflecting moderate valuation relative to earnings of $5.12 per share and an EPS growth forecast of +9.21% CAGR over the coming years.
AT&T reported fiscal year 2024 revenue of $122.34 billion, nearly flat compared to 2023’s $122.43 billion, reflecting a -0.08% revenue growth rate. However, net income declined by -23.97% year-over-year to $10.95 billion in 2024 from $14.4 billion in 2023, influenced by elevated operating expenses and capital investments necessary for network upgrades.
Operating income also contracted from $24.77 billion in 2023 to $19.05 billion in 2024, with the operating margin narrowing from 20.23% to 15.57%. Despite this, the gross profit margin improved significantly to 77.95% in 2024 from 59.06% the prior year, signaling better cost controls in revenue generation.
Strategic Growth Drivers: Fiber Expansion and 5G Deployment#
AT&T’s fiber rollout remains a cornerstone of its growth strategy, with the company passing over 30 million locations by Q2 2025 and targeting 4 million new locations annually through 2026, aiming for approximately 50 million locations by 2030. This expansion is capital-intensive, reflected in capital expenditures of $20.26 billion in 2024, up from $17.85 billion in 2023.
The 5G network investments complement fiber deployment, focusing on urban and suburban markets to enhance network speed and capacity. This dual infrastructure investment positions AT&T to capture growing demand for high-speed broadband and next-generation wireless connectivity, critical for enterprise and consumer segments.
Debt Profile and Financial Health#
AT&T’s debt structure remains a focal point, with total debt at $145.16 billion and net debt at $141.86 billion as of the end of 2024. The company’s debt-to-EBITDA ratio is approximately 3.09x trailing twelve months, aligning with the reported Q2 2025 figure of around 2.64x, which suggests some variation depending on data timing but overall indicates manageable leverage within industry norms.
Despite substantial debt, AT&T maintains a current ratio of 0.81x, typical for capital-intensive telecoms, reflecting working capital constraints but adequate liquidity for ongoing operations. The company’s interest expense and refinancing strategy are critical amid rising interest rates, with AT&T actively managing maturities to mitigate refinancing risk.
Dividend Sustainability and Shareholder Returns#
AT&T continues to prioritize shareholder returns, maintaining a dividend yield of approximately 5.92% with a payout ratio near 70.93%. The company’s free cash flow of $18.51 billion in 2024 comfortably covers dividend payments totaling $8.21 billion, supporting dividend sustainability despite heavy capital spending.
The stable dividend payments, with quarterly dividends of $0.33438, reflect management’s commitment to balancing growth investments with shareholder distributions. However, given the capital intensity and debt servicing demands, dividend growth has remained flat over the past five years, signaling cautious capital allocation.
Competitive Landscape and Industry Context#
AT&T operates in a highly competitive U.S. telecom market alongside Verizon and T-Mobile. While Verizon often leads in network quality, AT&T’s aggressive fiber and 5G investments aim to sustain competitive parity and customer retention. T-Mobile’s pricing strategies and innovative offerings continue to pressure market share.
The broader telecom industry is witnessing rapid adoption of 5G and fiber technologies, driving substantial infrastructure investments. AT&T’s strategy aligns with these trends, focusing on high-speed connectivity and enterprise solutions to differentiate its service offerings.
Key Financial Metrics Table#
| Metric | 2024 | 2023 | Change |
|---|---|---|---|
| Revenue | $122.34B | $122.43B | -0.08% |
| Net Income | $10.95B | $14.4B | -23.97% |
| Operating Income | $19.05B | $24.77B | -23.11% |
| Gross Profit Margin | 77.95% | 59.06% | +18.89 ppt |
| Capital Expenditure | $20.26B | $17.85B | +13.46% |
| Free Cash Flow | $18.51B | $20.46B | -9.54% |
| Dividend Payout Ratio | 70.93% | 70.93% | 0.00% |
| Debt to EBITDA (TTM) | 3.09x | 3.5x (approx) | Improved |
Analyst Earnings and Forward Outlook#
Analyst estimates forecast steady revenue growth with a 1.64% CAGR and EPS growth of approximately 9.21% CAGR through 2029. Projected revenues are expected to reach $133.35 billion by 2029, with net income rising to nearly $20.95 billion.
Forward P/E ratios indicate a valuation compression from 13.71x in 2025 to 9.64x in 2029, reflecting anticipated earnings growth and potential margin stabilization.
What This Means For Investors#
- Growth Versus Debt: AT&T balances growth through fiber and 5G investments with a manageable debt profile. Investors should monitor debt levels relative to EBITDA and free cash flow coverage as a gauge of financial health.
- Dividend Stability: The company’s dividend remains sustainable given current free cash flow, but limited dividend growth signals capital allocation prioritizing infrastructure expansion.
- Competitive Position: Strategic infrastructure investments aim to maintain market share against Verizon and T-Mobile, with fiber and 5G as key differentiators.
- Interest Rate Sensitivity: Rising rates could pressure interest expenses; active debt management is critical to maintain financial flexibility.
Key Takeaways#
- AT&T’s Q2 2025 performance reflects resilience amid strategic investments in fiber and 5G.
- The company’s debt-to-EBITDA ratio indicates manageable leverage but requires ongoing vigilance.
- Dividend payments are well-covered by free cash flow, though dividend growth remains flat.
- Fiber expansion and 5G deployment are central to sustaining long-term revenue growth.
- Competitive pressures from Verizon and T-Mobile remain significant but are addressed through infrastructure and service enhancements.
Sources:
- AT&T Reports Q2 2025 Financial Performance
- Transcript of AT&T Earnings Call
- FierceWireless 5G Industry Data
All financial data sourced from Monexa AI.