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

Strong execution in “Advanced Connectivity” drove accelerating results (good / surprising): - Best-ever Q2 AT&T Fiber net adds and record combined fiber + fixed wireless net adds. - +1M+ Advanced Connectivity subscribers from fiber, fixed wireless, and postpaid phones; all three posted higher YoY net adds. - Service revenue +2.7% YoY, total revenue +2.3% YoY. - Adjusted EBITDA +5.2% YoY and margin +110 bps to 39.1% (highest consolidated adjusted EBITDA margin since the business refocused on Advanced Connectivity). - 42.5% convergence rate of advanced home internet customers also holding a postpaid wireless account (45% excluding Lumen-acquired footprint).

Guidance held / reaffirmed with margin + EPS growth (forecast / investors care): - Full-year outlook unchanged: low single-digit service revenue growth; 3%–4% adjusted EBITDA growth. - Adjusted EPS $2.25–$2.35 for the year (Q2 $0.65, +20%+ YoY vs. $0.54). - Wireless and fiber growth remained healthy: - Wireless service revenues +3.3% YoY (postpaid phone net adds +432k), with postpaid phone ARPU up YoY while postpaid churn decreased. - Advanced home internet service revenues +27% YoY, driven by fiber acceleration and Lumen fiber asset acquisition (Lumen impact explains Fiber ARPU -1.3% YoY; ~flat ex-Lumen).

Capex + cash flow: free cash flow beat, but fiber build is capital intensive (good with a watch item): - Q2 capex $6.1B vs. $5.1B a year ago (driven by faster fiber deployment). - Free cash flow $4.7B (+~$300M YoY), above the high end of prior guidance ($4.0B–$4.5B). - Full-year expectations: $18B+ free cash flow and $23B–$24B capex. - Expectation by call: more “ratable” capex in 2H 2026 vs. ramping in 2H 2025; Q4 cash flow stronger than Q4 2025 due to fewer discrete impacts (legal/pension items).