AT&T, Inc. - 5.625% NT REDEEM 01/08/2067 USD 25

Strong momentum in “Advanced Connectivity” drove best-in-years profitability - Consolidated service revenue: +3.8% YoY (best performance in 4+ years) - Adjusted EBITDA: +5.4% YoY, with 38.7% margin (highest third-quarter margin since AT&T refocused on advanced connectivity) - Adjusted EPS: $0.65 (+20% YoY) driven by EBITDA growth and lower depreciation - Implication: investor takeaway is improving operating leverage while scaling fiber + wireless, not just revenue growth.

Customer/strategy execution: accelerating converged household growth - Advanced Connectivity net adds: +1M+ subscribers across fiber, fixed wireless, and postpaid phone (best quarter in 4+ years; second straight quarter of >1M net adds) - Converged penetration: ~43% of advanced home internet customers also have postpaid wireless - Sequential acceleration: added ~350k customer relationships to converged base (faster than Q2); includes Lumen territories showing +250 bps converged penetration since closing (early February) - Fiber + fixed wireless demand remains strong, but management said home internet net adds typically moderate in Q4 due to seasonality.

Segment growth mix and ARPU headwinds (good growth, but pricing pressure) - Advanced Connectivity service revenues: +6.1% YoY; EBITDA +7.3% - Wireless service revenues: +5% YoY, with postpaid phone ARPU +4% (pricing strategy execution and back-book management) - Advanced home internet: >+23% YoY with ~696k net adds (including 416k AT&T Fiber, 280k Internet Air) - Key negative: Fiber ARPU -4% YoY (intro pricing, more discounts among converged accounts, and Quantum brand mix in acquired territories). Management expects ARPU to remain pressured near-term similarly into Q4.