AT&T’s 2025 fiscal year concluded with robust operational momentum, characterized by outperformed expectations and major strategic initiatives. However, the telecommunications giant now navigates a complex landscape where ambitious growth plans are tempered by a significant crisis, creating a dual narrative for investors.
Financial Performance and Forward Guidance
The company’s fourth-quarter results for 2025 surpassed market forecasts. AT&T reported adjusted earnings per share of $0.52, clearly exceeding the projected $0.46. A notable highlight was the 3.6% revenue increase to $33.5 billion, marking the strongest growth rate the company has seen in four years. This upward trajectory is further supported by a solid full-year free cash flow of $16.6 billion, providing substantial financial flexibility for both strategic investments and shareholder returns.
Management has issued optimistic guidance for the ongoing 2026 fiscal year. The company is targeting adjusted earnings per share in a range of $2.25 to $2.35. Furthermore, free cash flow is anticipated to surpass the $18 billion threshold. This confidence is largely rooted in AT&T’s continued strategic focus on fiber-optic network expansion and advanced connectivity solutions.
Growth Engine: Acquisition and Tech Partnership
A cornerstone of this expansion strategy was finalized on February 2, 2026, with the acquisition of Lumen Technologies’ fiber-optic business for $5.75 billion. This purchase significantly extends AT&T’s reach, adding over one million new fiber customers across eleven states. While integration costs, including interest expenses and one-time charges, are expected to reduce 2026 earnings by approximately $0.05 per share, the move is a long-term play. It paves the way toward AT&T’s goal of reaching 60 million fiber locations by the end of 2030.
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In a parallel development, a new partnership with Amazon is generating significant attention. Dubbed “Amazon Leo,” the alliance will integrate AT&T’s terrestrial fiber infrastructure with Amazon’s satellite-based “Project Kuiper” network. The collaboration aims to eliminate coverage gaps and provide business clients with a resilient, hybrid cloud connection via AWS.
The Persistent Shadow of Data Security
Despite these business successes, AT&T is confronting serious challenges in the realm of data security. Reports emerged in early February concerning a dataset containing roughly 176 million records circulating online. The compromised information is said to include sensitive customer details such as Social Security numbers and dates of birth.
Market analysts view this incident as a substantial reputational risk that has the potential to overshadow positive news regarding profit growth and the Amazon alliance. The stock’s performance, however, has shown resilience in the face of these concerns. Over the past seven trading days, AT&T shares have advanced more than nine percent, with a current price of €22.95 standing well above its 50-day moving average of €20.91.
The coming months will be critical. Investors will monitor whether the synergies from the Lumen acquisition can quickly offset the associated integration costs. Simultaneously, close attention will be paid to how AT&T manages the legal and regulatory fallout from the data breach, all while the practical implementation of the Amazon partnership gets underway.
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