AT&T, Inc. - 5.35% NT REDEEM 01/11/2066 USD 25

Major performance beat / operating leverage (good): - Q3 consolidated service revenue +3.8% YoY (best in 4+ years). - Adjusted EBITDA +5.4% YoY, margin 38.7% (highest third-quarter margin since AT&T refocused on advanced connectivity). - Adjusted EPS $0.65 (+20% YoY) driven by EBITDA growth and lower depreciation.

Advanced Connectivity momentum driving subscriber growth (good + surprising): - Added >1 million Advanced Connectivity subscribers (fiber, fixed wireless, postpaid phone) — best quarter in 4+ years and 2nd straight quarter with >1 million net adds. - ~43% of advanced home internet customers now also have AT&T postpaid wireless. - Converged account net adds: ~350k in Q3 (faster sequential pace than Q2). - Business Advanced Connectivity service revenues +2.5% YoY and management expects full-year Advanced Connectivity service revenue growth 5%+ and EBITDA growth 6%+.

Outlook kept strong but Q4 has headwinds (good + bad): - Full-year guidance maintained/raised: consolidated service revenues low single-digit growth, adjusted EBITDA upper end of 3–4% range. - Adjusted EPS raised to ~$2.40 (from prior $2.25–2.35) due largely to lower depreciation from Mexico held-for-sale accounting. - Q4 EBITDA growth impacted by: higher marketing/customer acquisition costs (device launch cycle + expanded fiber go-to-market) and ~$100M unfavorable vendor dispute settlements (primarily legacy segment).