AT&T Inc Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Peter Supino - Wolfe Research, LLC - Analyst : Hi. Good morning. A question on tariffs and another on the growth environment. If tariffs increase the cost of phones, I wonder how you would envision AT&T and the industry potentially reacting to that on a sustained basis? And then with your comments on the possibility of a slower growth environment, I wonder if you could refresh us on the expense reduction opportunity outside of Consumer Wireline and what else you might have in mind for a slower growth marketplace? Thank you.

Question: Benjamin Swinburne - Morgan Stanley - Analyst : Thanks. Good morning. Two questions. John, I doubt you'll answer this specifically, but I figured I'd ask anyway. There was a press report back in March around AT&T and talks to acquire Lumen's mass market consumer fiber business. Just curious if you had any comment on that or maybe just if you can't or want to talk more broadly about how you're thinking about inorganic investments at AT&T just given the transformation over the last few years, but also the success you're having with your fiber strategy in general. And then I was curious if you could talk a little bit more about the FCC's recent orders on legacy infrastructure. It sounded like you thought maybe you could move quicker. I don't know if that's on wire centers or that $6 billion pool or kind of all of the above, but could you come back to that comment and tell us what's happened and how that may impact your ability to take costs out of the business even faster than you have already laid out for us? Thank you very much.

Question: John Hodulik - UBS Securities LLC - Analyst : Great. Thank you. And I think just two quick ones. First, for Pascal, is there any way to frame the impact of the -- or quantify the impact of the higher upgrades that you're seeing so far in the second quarter? I guess, you gave us the free cash flow for the quarter, but anything on what that could do to wireless margins or wireless EBITDA growth? That's number one. And then on the business side, if we add back the vendor adjustments, it looks like EBITDA was only down about 5%. Is this a good rate going forward? I mean, obviously, the trend had been above 20%. You guys have done a great job on the cost side, but is this about the level that we should expect as we look out over the next 12 months in that segment? Thanks.

Question: Michael Rollins - Citigroup - Analyst : Thanks, and good morning. Two topics, if I could. First, AT&T reported an acceleration of fixed wireless net adds and coming at a time when you're expanding the mid-band 5G coverage. So curious if you can give us an update on how AT&T is looking at the penetration and financial prospects from fixed wireless? And do these network enhancements gives you an expanded opportunity to take more share of broadband outside of the [50 million-plus] passings that you're trying to get to with fiber by the end of this decade? And then just second, on ARPU. Just curious, when you think about the pricing actions that AT&T has employed over the last couple of years and you set that against the competitive backdrop and macro landscape, could you just frame the opportunities for AT&T to continue to improve ARPU for both postpaid phones and the fiber subscribers. Thanks.

Question: Bryan Kraft - Deutsche Bank - Analyst : Thanks. Good morning. Just regarding Pascal's churn comments, I wanted to follow up there. I think you said, Pascal, that 2Q would be similar to 1Q and then second half would be characterized by typical seasonality. I assume that means we should look at the historical sequential step-ups in the back half of the year off of 2Q and estimated churn. Is that the right way to think about? And also, in general, how much of the higher churn is a function of, what you say, contract roll-offs picking up versus increased competitive intensity? And then lastly, I was wondering if you would just comment on your outlook for gross add performance. Would you expect this momentum in

Question: Sebastiano Petti - JPMorgan - Analyst : Hi. Thank you for taking the question. Just wanted to maybe, I guess, kind of wrap in Bryan as well as John and Mike's questions, just help us think about the comfort or the confidence in getting to the higher end of the Mobility service revenue, I guess, more particularly the EBITDA guidance of the higher end of 3% to 4%. Just what underlies or underscores that confidence from the management team just given the higher activity that we're seeing here, obviously, cost opportunities, but just you could double-click on that a little bit? And then, John, going back to perhaps what you talked about of the longer-term plans were based on low single-digit GDP, moderating inflation and the management team's ability to adjust their operating posture to prioritize free cash flow. I mean, does that put your 45 million fiber target passings at risk at all as you think about or extrapolate over the next several years? Thank you.

Question: Jim Schneider - Goldman Sachs - Analyst : Good morning. Thanks for taking my questions. Two, if I may. First is on the overall health. How would you characterize the state of the consumer at this point? Obviously, many moving parts in this market. But do you see any evidence of consumers less willing to trade up or even trading down or consumer credit quality issues that may be impacting things over the next couple of quarters from what you can see today? And the second is on capital allocation. Can you maybe just frame your earlier comments on M&A and buybacks in terms of is the buyback guidance you've provided independent of any inorganic activities you might consider? Or is it contingent on it? And if it's contingent, is there a minimum level of buybacks you would not go below? Thank you.

Question: Kannan Venkateshwar - Barclays Capital Inc - Analyst : Thank you. So John, just from a macro environment perspective, I guess, is there a certain growth framework you're working with, especially on the wireless side? I mean, in terms of either trying to retain a certain amount of share in the market or a certain amount of activity. Is that something that sets a floor in some ways in terms of managing your P&L on the Mobility side? And then on the copper decommissioning side, I think there's been a couple of real estate sales, at least for some of the wire centers earlier this year. Is there more opportunity to extract capital out of that business potentially at a faster pace at some point? And what should we look out for in terms of goal posts as that process moves along? Thank you.