What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-10-31 compared with 2025-07-24 · 276 added, 236 removed, 1033 unchanged (33% of the section changed)

2 unchanged sentences

Dollars in millions except per share amounts

Three months ended Six months ended

June 30, June 30,

Three months ended Nine months ended

September 30, September 30,

2025 2024 2025 2024

17 unchanged sentences

Interest expense ( 1,700 ) ( 1,675 ) ( 5,013 ) ( 5,098 )

Equity in net income of affiliates 485 348 1,925 643

Equity in net income (loss) of affiliates

( 20 ) 272 1,905 915

Other income (expense) — net

6 unchanged sentences

( 363 ) ( 319 ) ( 1,065 ) ( 977 )

Net Income Attributable to AT&T $ 4,500 $ 3,597 $ 8,851 $ 7,042

Net Income (Loss) Attributable to AT&T $ 9,314 $ ( 174 ) $ 18,165 $ 6,868

Preferred Stock Dividends and Redemption Gain

( 36 ) ( 52 ) ( 28 ) ( 153 )

Net Income Attributable to Common Stock $ 4,464 $ 3,546 $ 8,859 $ 6,941

Basic Earnings Per Share Attributable to Common Stock $ 0.62 $ 0.49 $ 1.22 $ 0.96

Diluted Earnings Per Share Attributable to Common Stock $ 0.62 $ 0.49 $ 1.22 $ 0.96

Net Income (Loss) Attributable to Common Stock $ 9,278 $ ( 226 ) $ 18,137 $ 6,715

Basic Earnings (Loss) Per Share Attributable to

$ 1.29 $ ( 0.03 ) $ 2.51 $ 0.93

Diluted Earnings (Loss) Per Share Attributable to

$ 1.29 $ ( 0.03 ) $ 2.51 $ 0.93

Weighted Average Number of Common Shares

7 unchanged sentences

Dollars in millions

Three months ended Six months ended

June 30, June 30,

Three months ended Nine months ended

September 30, September 30,

2025 2024 2025 2024

7 unchanged sentences

Net unrealized gains (losses), net of taxes of $ 2 , $ 6 , $ 6

2 ( 7 ) 12 ( 17 )

Reclassification adjustment included in net income, net of

10 unchanged sentences

( 356 ) ( 381 ) ( 1,070 ) ( 1,142 )

Reclassification adjustment realized in net income, net of

taxes of $( 4 ), $ 0 , $( 4 ) and $ 0

Other comprehensive income (loss) ( 448 ) ( 792 ) ( 1,443 ) ( 1,652 )

Total comprehensive income

Total comprehensive income (loss)

9,229 ( 647 ) 17,787 6,193

2 unchanged sentences

( 363 ) ( 319 ) ( 1,065 ) ( 977 )

Total Comprehensive Income Attributable to AT&T

Total Comprehensive Income (Loss) Attributable to AT&T

$ 8,866 $ ( 966 ) $ 16,722 $ 5,216

2 unchanged sentences

Dollars in millions except per share amounts

June 30, December 31,

September 30, December 31,

Assets (Unaudited)

31 unchanged sentences

Stockholders’ Equity

Preferred stock ($ 1 par value, 10,000,000 authorized at June 30, 2025 and December 31, 2024):

Series A ( 48,000 issued and outstanding at June 30, 2025 and December 31, 2024)

Series B ( 20,000 issued and 0 outstanding at June 30, 2025 and 20,000 issued and outstanding

December 31, 2024)

Series C ( 70,000 issued and outstanding at June 30, 2025 and December 31, 2024)

Common stock ($ 1 par value, 14,000,000,000 authorized at June 30, 2025 and

Preferred stock ($ 1 par value, 10,000,000 authorized at September 30, 2025 and December 31, 2024):

Series A ( 48,000 issued and outstanding at September 30, 2025 and December 31, 2024)

Series B ( 20,000 issued and 0 outstanding at September 30, 2025 and 20,000 issued and outstanding

at December 31, 2024)

Series C ( 70,000 issued and outstanding at September 30, 2025 and December 31, 2024)

Common stock ($ 1 par value, 14,000,000,000 authorized at September 30, 2025 and

December 31, 2024:

issued 7,620,748,598 at June 30, 2025 and December 31, 2024)

issued 7,620,748,598 at September 30, 2025 and December 31, 2024)

Additional paid-in capital 106,461 109,108

Retained earnings 13,974 1,871

Treasury stock ( 459,382,925 at June 30, 2025 and 444,853,148 at December 31, 2024, at cost)

Treasury stock ( 511,590,791 at September 30, 2025 and 444,853,148 at December 31, 2024, at cost)

( 16,700 ) ( 15,023 )

6 unchanged sentences

Dollars in millions

Six months ended

Nine months ended

September 30,

Operating Activities

10 unchanged sentences

Equipment installment receivables and related sales

1,115 ( 320 )

Contract asset and cost deferral

Inventories, prepaid and other current assets

( 1,952 ) ( 658 )

Accounts payable and other accrued liabilities

10 unchanged sentences

Distributions from DIRECTV in excess of cumulative equity in earnings — 928

(Purchases), sales and settlements of securities and investments - net ( 1,084 ) 1,147

(Purchases), sales and settlements of securities - net

Other - net ( 789 ) ( 532 )

1 unchanged sentence

Financing Activities

Net change in short-term borrowings with original maturities of three months or less — 2,686

Issuance of other short-term borrowings — 491

9 unchanged sentences

Other - net ( 292 ) ( 1,808 )

Net Cash Used in Financing Activities ( 598 ) ( 13,293 )

Net Cash Provided by (Used in) Financing Activities

2,391 ( 18,855 )

Net increase (decrease) in cash and cash equivalents and restricted cash $ 16,922 $ ( 4,107 )

4 unchanged sentences

Dollars and shares in millions except per share amounts

Three months ended Six months ended

June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

Three months ended Nine months ended

September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024

Shares Amount Shares Amount Shares Amount Shares Amount

26 unchanged sentences

Balance at beginning of period $ 6,680 $ 2 $ 1,871 $ ( 5,015 )

Net income attributable to AT&T

Net income (loss) attributable to AT&T

9,314 ( 174 ) 18,165 6,868

8 unchanged sentences

Dollars and shares in millions except per share amounts

Three months ended Six months ended

June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

Three months ended Nine months ended

September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024

Shares Amount Shares Amount Shares Amount Shares Amount

29 unchanged sentences

See Notes to Consolidated Financial Statements.

JUNE 30, 2025

SEPTEMBER 30, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

16 unchanged sentences

We began buying back stock under this program in the second quarter of 2025.

For the six months ended June 30, 2025, we had repurchased approximately 34 million shares totaling $ 958 under this authorization, excluding brokerage fees and the one percent excise tax imposed by the Inflation Reduction Act of 2022.

For the nine months ended September 30, 2025, we had repurchased approximately 87 million shares totaling $ 2,444 under this authorization, excluding brokerage fees and the one percent excise tax imposed by the Inflation Reduction Act of 2022.

To implement repurchase authorizations, we use open market repurchase programs, relying on Rule 10b5-1 of the Securities Exchange Act of 1934 where feasible.

Tax Legislation On July 4, 2025, the One Big Beautiful Bill Act was enacted, which restores or makes permanent certain expiring business tax provisions from the Tax Cuts and Jobs Act of 2017.

We do not anticipate the legislation to materially impact our income tax expense, but expect that it will have a material impact on cash taxes paid relative to our expectations.

As a result of the legislation, we reduced our taxable income position and, at September 30, 2025, “Prepaid and other current assets” on our consolidated balance sheet included $ 3,467 of current tax assets, compared to $ 2,236 at December 31, 2024.

The legislation did not materially impact our income tax expense, but we expect it will result in a material decrease to cash taxes paid relative to our expectations.

New Accounting Standards

Internal-Use Software In September 2025, the Financial Accounting Standards Board issued ASU No.

2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software (ASU 2025-06).

ASU 2025-06 removes references to prescriptive and sequential software development stages and requires software cost capitalization when management has authorized and committed to funding, and it is probable that the project will be completed, and the software used for its intended function.

ASU 2025-06 will be effective for annual reporting periods beginning after December 15, 2027.

We are evaluating the impacts of our adoption of ASU 2025-06 and currently do not expect that it will have a material impact on our financial statements.

SEPTEMBER 30, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

EARNINGS PER SHARE

A reconciliation of the numerators and denominators of basic and diluted earnings per share is shown in the table below:

Three months ended Six months ended

June 30, June 30,

Three months ended Nine months ended

September 30, September 30,

2025 2024 2025 2024

Numerator for basic earnings per share:

Net Income Attributable to Common Stock $ 4,464 $ 3,546 $ 8,859 $ 6,941

Net Income (Loss) Attributable to Common Stock $ 9,278 $ ( 226 ) $ 18,137 $ 6,715

Dilutive impact of share-based payment 3 — 9 —

5 unchanged sentences

Denominator for diluted earnings per share 7,169 7,208 7,203 7,200

JUNE 30, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

OTHER COMPREHENSIVE INCOME

12 unchanged sentences

287 24 ( 689 ) ( 1,065 ) ( 1,443 )

Balance as of June 30, 2025 $ ( 1,546 ) $ ( 30 ) $ ( 1,110 ) $ 2,486 $ ( 200 )

Balance as of September 30, 2025 $ ( 1,468 ) $ ( 22 ) $ ( 1,293 ) $ 2,135 $ ( 648 )

Foreign Currency Translation Adjustment Net Unrealized Gains (Losses) on Securities Net Unrealized Gains (Losses) on Derivative Instruments Defined Benefit Postretirement Plans Accumulated Other Comprehensive Income (Loss)

9 unchanged sentences

( 202 ) 23 ( 331 ) ( 1,142 ) ( 1,652 )

Balance as of June 30, 2024 $ ( 1,402 ) $ ( 64 ) $ ( 1,056 ) $ 3,962 $ 1,440

Balance as of September 30, 2024 $ ( 1,539 ) $ ( 34 ) $ ( 1,360 ) $ 3,581 $ 648

1 (Gains) losses are included in “Other income (expense) - net” in the consolidated statements of income.

1 unchanged sentence

3 The amortization of prior service credit associated with postretirement benefits are included in “Other income (expense) - net” in the consolidated statements of income (see Note 6).

SEPTEMBER 30, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

SEGMENT INFORMATION

8 unchanged sentences

Shared costs amongst the business units generally include information technology, network engineering and construction costs, advertising and other general and administrative expenses.

JUNE 30, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

The Communications segment provides wireless and wireline telecom and broadband services to consumers located in the U.S.

9 unchanged sentences

Corporate includes :

• DTV-related retained costs , which are costs previously allocated to the Video business that were retained after the transaction, net of reimbursements from DIRECTV Entertainment Holdings, LLC (DIRECTV) under transition service agreements.

• DTV-related retained costs , which are costs previously allocated to the Video business that were retained, net of reimbursements from DIRECTV Entertainment Holdings, LLC (DIRECTV) under transition service agreements.

With the sale of our remaining interest in DIRECTV, we will no longer report these costs in 2026.

• Parent administration support , which includes costs borne by AT&T where the business units do not influence decision making.

3 unchanged sentences

• Certain significant items , which includes items associated with the merger and integration of acquired or divested businesses, including amortization of intangible assets, employee separation charges associated with voluntary and/or strategic offers, asset impairments and abandonments and restructuring, and other items for which the segments are not being evaluated.

“Interest expense,” “Other income (expense) – net” and “Equity in net income of affiliates” are managed only on a total company basis and are, accordingly, reflected only in consolidated results.

JUNE 30, 2025

“Interest expense,” “Other income (expense) – net” and “Equity in net income (loss) of affiliates” are managed only on a total company basis and are, accordingly, reflected only in consolidated results.

SEPTEMBER 30, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

For the three months ended June 30, 2025

For the three months ended September 30, 2025

Revenues Operations and Support Expenses Depreciation and Amortization Operating Income (Loss)

17 unchanged sentences

$ 30,709 $ 19,273 $ 5,317 $ 6,119

For the three months ended June 30, 2024

For the three months ended September 30, 2024

Revenues Operations and Support Expenses Depreciation and Amortization Operating Income (Loss)

17 unchanged sentences

$ 30,213 $ 23,010 $ 5,087 $ 2,116

JUNE 30, 2025

SEPTEMBER 30, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

For the six months ended June 30, 2025

For the nine months ended September 30, 2025

Revenues Operations and Support Expenses Depreciation and Amortization Operating Income (Loss)

16 unchanged sentences

$ 92,182 $ 58,050 $ 15,758 $ 18,374

For the six months ended June 30, 2024

For the nine months ended September 30, 2024

Revenues Operations and Support Expenses Depreciation and Amortization Operating Income (Loss)

16 unchanged sentences

$ 90,038 $ 61,109 $ 15,206 $ 13,723

JUNE 30, 2025

SEPTEMBER 30, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

2 unchanged sentences

Three months ended

June 30, Six months ended

September 30,

Nine months ended

September 30,

2025 2024 2025 2024

11 unchanged sentences

Interest expense 1,700 1,675 5,013 5,098

Equity in net income of affiliates 485 348 1,925 643

Equity in net income (loss) of affiliates

( 20 ) 272 1,905 915

Other income (expense) — net

2 unchanged sentences

The following tables present assets, investments in equity affiliates and capital expenditures by segment:

June 30, December 31,

September 30, December 31,

Assets Investments in Equity Method Investees Assets

6 unchanged sentences

Total $ 423,213 $ 1,056 $ 394,795 $ 295

Six months ended

Nine months ended

September 30,

Capital Expenditures

3 unchanged sentences

Total $ 14,061 $ 13,420

JUNE 30, 2025

SEPTEMBER 30, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

3 unchanged sentences

The following tables set forth reported revenue by category and by business unit:

For the three months ended June 30, 2025

For the three months ended September 30, 2025

Communications

10 unchanged sentences

1 Advanced connectivity services reported in Business Wireline.

For the three months ended June 30, 2024

For the three months ended September 30, 2024

Communications

10 unchanged sentences

1 Advanced connectivity services reported in Business Wireline.

For the six months ended June 30, 2025

For the nine months ended September 30, 2025

Communications

10 unchanged sentences

1 Advanced connectivity services reported in Business Wireline.

JUNE 30, 2025

SEPTEMBER 30, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

For the six months ended June 30, 2024

For the nine months ended September 30, 2024

Communications

13 unchanged sentences

The following table presents the deferred customer contract acquisition and fulfillment costs included on our consolidated balance sheets:

June 30, December 31,

September 30, December 31,

Consolidated Balance Sheets 2025 2024

7 unchanged sentences

Total deferred customer contract fulfillment costs $ 4,889 $ 5,390

The following table presents deferred customer contract acquisition and fulfillment cost amortization, which are primarily included in “Selling, general and administrative” and “Other cost of revenues,” respectively, for the six months ended:

June 30, June 30,

September 30, September 30,

Consolidated Statements of Income 2025 2024

7 unchanged sentences

Promotional equipment sales where we offer handset credits, which are allocated between equipment and service in proportion to their standalone selling prices, when customers commit to a

JUNE 30, 2025

SEPTEMBER 30, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

5 unchanged sentences

The following table presents contract assets and liabilities on our consolidated balance sheets:

June 30, December 31,

September 30, December 31,

Consolidated Balance Sheets 2025 2024

9 unchanged sentences

Performance obligations associated with wireless contracts are estimated using a portfolio approach in which we review all relevant promotional activities, calculating the remaining performance obligation using the average service component for the portfolio and the average device price.

As of June 30, 2025, the aggregate amount of the transaction price allocated to remaining performance obligations was $ 42,008 , of which we expect to recognize approximately 74 % by the end of 2026, with the balance recognized thereafter.

As of September 30, 2025, the aggregate amount of the transaction price allocated to remaining performance obligations was $ 42,017 , of which we expect to recognize approximately 65 % by the end of 2026, with the balance recognized thereafter.

PENSION AND POSTRETIREMENT BENEFITS

3 unchanged sentences

We do not have significant funding requirements in 2025.

We intend to voluntarily contribute approximately $ 1,500 to our pension plan by the end of 2026, with more than half of that in 2025.

We intend to voluntarily contribute approximately $ 1,500 to our pension plan by the end of 2026, with more than half of that in 2025, including $ 400 contributed during the third quarter of 2025.

We recognize actuarial gains and losses on pension and postretirement plan assets in our consolidated results as a component of “Other income (expense) – net” at our annual measurement date of December 31, unless earlier remeasurements are required.

JUNE 30, 2025

SEPTEMBER 30, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

2 unchanged sentences

The service cost component of net periodic pension (credit) cost is recorded in operating expenses in the consolidated statements of income while the remaining components are recorded in “Other income (expense) – net.”

Three months ended Six months ended

June 30, June 30,

Three months ended Nine months ended

September 30, September 30,

2025 2024 2025 2024

14 unchanged sentences

We also provide senior- and middle-management employees with nonqualified, unfunded supplemental retirement and savings plans.

Net supplemental pension benefits costs not included in the table above were $ 16 and $ 16 in the second quarter and $ 32 and $ 33 for the first six months of 2025 and 2024, respectively.

Net supplemental pension benefits costs not included in the table above were $ 16 and $ 17 in the third quarter and $ 48 and $ 50 for the first nine months of 2025 and 2024, respectively.

FAIR VALUE MEASUREMENTS AND DISCLOSURE

8 unchanged sentences

There have been no changes in the methodologies used since December 31, 2024.

JUNE 30, 2025

SEPTEMBER 30, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

2 unchanged sentences

The carrying amounts and estimated fair values of our long-term debt, including current maturities, and other financial instruments are summarized as follows:

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Carrying Fair Carrying Fair

8 unchanged sentences

The fair value measurements used for notes and debentures are considered Level 2 and are determined using various methods, including quoted prices for identical or similar securities in both active and inactive markets.

Following is the fair value leveling for investment securities that are measured at fair value and derivatives as of June 30, 2025 and December 31, 2024.

Following is the fair value leveling for investment securities that are measured at fair value and derivatives as of September 30, 2025 and December 31, 2024.

Derivatives designated as hedging instruments are reflected as “Prepaid and other current assets,” “Other Assets,” “Accounts payable and accrued liabilities,” and “Other noncurrent liabilities” on our consolidated balance sheets.

June 30, 2025

September 30, 2025

Level 1 Level 2 Level 3 Total

23 unchanged sentences

Investments in equity securities not traded on a national securities exchange are valued at cost, less any impairment, and adjusted for changes resulting from observable, orderly transactions for identical or similar securities.

JUNE 30, 2025

SEPTEMBER 30, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

2 unchanged sentences

The components comprising total gains and losses in the period on equity securities are as follows:

Three months ended Six months ended

June 30, June 30,

Three months ended Nine months ended

September 30, September 30,

2025 2024 2025 2024

2 unchanged sentences

Unrealized gains (losses) recognized on equity securities held at end of period $ 42 $ 80 $ 63 $ 214

At June 30, 2025, available-for-sale debt securities totaling $ 671 have maturities as follows - less than one year:

At September 30, 2025, available-for-sale debt securities totaling $ 661 have maturities as follows - less than one year:

one to three years:

20 unchanged sentences

Except for excluded components, changes in the fair value of derivative instruments designated as fair value hedges are offset against the change in fair value of the hedged assets or liabilities through earnings.

In the six months ended June 30, 2025 and 2024, no ineffectiveness was measured on fair value hedges.

In the nine months ended September 30, 2025 and 2024, no ineffectiveness was measured on fair value hedges.

Cash Flow Hedging We designate some of our cross-currency swaps as cash flow hedges to hedge our exposure to variability in expected future cash flows that are attributable to foreign currency risk and interest rate risk generated from our foreign-denominated debt.

3 unchanged sentences

dollar denominated interest rate.

JUNE 30, 2025

SEPTEMBER 30, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

7 unchanged sentences

Collateral and Credit-Risk Contingency We have entered into agreements with our derivative counterparties establishing collateral thresholds based on respective credit ratings and netting agreements.

At June 30, 2025, we had posted collateral of $ 355 (a deposit asset) and held collateral of $ 404 (a receipt liability).

Under the agreements, if AT&T’s credit rating had been downgraded two ratings levels by Fitch Ratings, one level by S&P and one level by Moody’s before the final collateral exchange in June, we would have been required to post additional collateral of $ 50 .

At September 30, 2025, we had posted collateral of $ 375 (a deposit asset) and held collateral of $ 405 (a receipt liability).

Under the agreements, if AT&T’s credit rating had been downgraded two ratings levels by Fitch Ratings, one level by S&P and one level by Moody’s before the final collateral exchange in September, we would have been required to post additional collateral of $ 54 .

If AT&T’s credit rating had been downgraded three ratings levels by Fitch Ratings, two levels by S&P and two levels by Moody’s, we would have been required to post additional collateral of $ 1,756 .

2 unchanged sentences

Following are the notional amounts of our outstanding derivative positions:

June 30, December 31,

September 30, December 31,

Cross-currency swaps $ 39,142 $ 34,884

2 unchanged sentences

Effect of Derivatives on the Consolidated Statements of Income

Three months ended Six months ended

June 30, June 30,

Three months ended Nine months ended

September 30, September 30,

Fair Value Hedging Relationships 2025 2024 2025 2024

7 unchanged sentences

In addition, the net swap settlements that accrued and settled in the periods above were offset against “Interest expense.”

JUNE 30, 2025

SEPTEMBER 30, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

1 unchanged sentence

The following table presents information for our cash flow hedging relationships:

Three months ended Six months ended

June 30, June 30,

Three months ended Nine months ended

September 30, September 30,

Cash Flow Hedging Relationships 2025 2024 2025 2024

10 unchanged sentences

The following table sets forth a summary of cash proceeds received, net of remittances paid, from sales of receivables:

Three months ended Six months ended

June 30, June 30,

Three months ended Nine months ended

September 30, September 30,

2025 2024 2025 2024

6 unchanged sentences

$ ( 288 ) $ 370 $ 527 $ 64

1 Cash from initial sales of $ 2,779 and $ 2,532 for the three months and $ 6,577 and $ 5,406 for the six months ended June 30, 2025 and 2024, respectively.

1 Cash from initial sales of $ 2,451 and $ 2,442 for the three months and $ 9,028 and $ 7,848 for the nine months ended September 30, 2025 and 2024, respectively.

2 Net of facility fees.

2 unchanged sentences

In the event cash is received on the beneficial interests, those receipts are classified as cash flows from investing activities, when applicable.

JUNE 30, 2025

SEPTEMBER 30, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

2 unchanged sentences

The following table sets forth a summary of the receivables and accounts being serviced:

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Equipment Equipment

22 unchanged sentences

The following table sets forth a summary of equipment installment receivables sold under this program:

Three months ended Six months ended

June 30, June 30,

Three months ended Nine months ended

September 30, September 30,

2025 2024 2025 2024

11 unchanged sentences

The fair value measurements used for the beneficial interests and the guarantee obligation are considered Level 3 under the Fair Value Measurement and Disclosure framework (see Note 7).

JUNE 30, 2025

SEPTEMBER 30, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

1 unchanged sentence

The following table presents the previously transferred equipment installment receivables, which we repurchased in exchange for the associated beneficial interests:

Three months ended Six months ended

June 30, June 30,

Three months ended Nine months ended

September 30, September 30,

2025 2024 2025 2024

4 unchanged sentences

1 These gains (losses) are included in “Selling, general and administrative” expense in the consolidated statements of income.

At June 30, 2025 and December 31, 2024, our beneficial interests were $ 1,990 and $ 3,185 , respectively, of which $ 1,214 and $ 1,906 are included in “Prepaid and other current assets” on our consolidated balance sheets, with the remainder in “Other Assets.” The guarantee obligation at June 30, 2025 and December 31, 2024 was $ 263 and $ 301 , respectively, of which $ 140 and $ 150 are included in “Accounts payable and accrued liabilities” on our consolidated balance sheets, with the remainder in “Other noncurrent liabilities.” Our maximum exposure to loss as a result of selling these equipment installment receivables is limited to the total amount of our beneficial interests and guarantee obligation.

At September 30, 2025 and December 31, 2024, our beneficial interests were $ 1,993 and $ 3,185 , respectively, of which $ 1,284 and $ 1,906 are included in “Prepaid and other current assets” on our consolidated balance sheets, with the remainder in “Other Assets.” The guarantee obligation at September 30, 2025 and December 31, 2024 was $ 222 and $ 301 , respectively, of which $ 114 and $ 150 are included in “Accounts payable and accrued liabilities” on our consolidated balance sheets, with the remainder in “Other noncurrent liabilities.” Our maximum exposure to loss as a result of selling these equipment installment receivables is limited to the total amount of our beneficial interests and guarantee obligation.

Revolving Receivables Program

6 unchanged sentences

The following table sets forth a summary of the revolving receivables sold:

Three months ended Six months ended

June 30, June 30,

Three months ended Nine months ended

September 30, September 30,

2025 2024 2025 2024

7 unchanged sentences

$ 7,446 $ 5,463 $ 22,051 $ 14,075

1 Includes initial sales of receivables of $ 0 and $ 0 for the three months and $ 170 and $ 300 for the six months ended June 30, 2025 and 2024, respectively.

1 Includes initial sales of receivables of $ 0 and $ 970 for the three months and $ 170 and $ 1,270 for the nine months ended September 30, 2025 and 2024, respectively.

2 Receivables net of allowance and other reserves.

TRANSACTIONS WITH DIRECTV

We account for our investment in DIRECTV under the equity method and record our share of DIRECTV earnings as equity in net income of affiliates, with DIRECTV considered a related party.

On September 29, 2024, we agreed to sell our interest in DIRECTV to TPG Capital (TPG) for approximately $ 7,600 in cash payments.

Beginning in third-quarter 2024, our investment in DIRECTV was reduced to zero on our consolidated balance sheet, resulting from aggregate cash receipts exceeding our initial investment balance plus our cumulative equity in DIRECTV earnings.

As we are not committed, implicitly or explicitly, to provide financial or other support to DIRECTV, we record cash distributions

JUNE 30, 2025

Prior to its sale, we accounted for our investment in DIRECTV under the equity method and recorded our share of DIRECTV earnings as equity in net income of affiliates, with DIRECTV considered a related party.

On July 2, 2025, we sold our interest in DIRECTV to TPG Capital (TPG) and recorded a current note receivable of approximately $ 3,600 , which we expect to receive the majority of by the end of 2025, and a long-term receivable of $ 500 .

The disposition of DIRECTV also resulted in the release of approximately $ 2,900 of historical deferred tax liabilities.

We recorded a gain on the sale of DIRECTV of approximately $ 5,500 , which includes the impact of the transfer of deferred tax liabilities, indemnification liabilities and unfavorable contracts, in “Other income (expense) – net” in the consolidated statements of income in the third quarter of 2025.

SEPTEMBER 30, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

received in excess of our share of DIRECTV’s earnings in “Equity in net income of affiliates” in the consolidated statements of income and as cash provided by operations in the consolidated statements of cash flows.

The following table sets forth our share of DIRECTV’s earnings included in “Equity in net income of affiliates” and cash distributions received from DIRECTV:

Three months ended Six months ended

June 30, June 30,

At September 30, 2025, the current note receivable balance included in “Prepaid and other current assets” on our consolidated balance sheet was $ 3,291 , reflecting approximately $ 320 collected during the third quarter.

Prior to disposition, in the third quarter of 2024 our investment in DIRECTV was reduced to zero on our consolidated balance sheet, as a result of aggregate cash receipts exceeding our initial investment balance plus our cumulative equity in DIRECTV earnings.

As we were not committed, implicitly or explicitly, to provide financial or other support to DIRECTV, we recorded cash distributions received in excess of our share of DIRECTV’s earnings in “Equity in net income of affiliates” in the consolidated statements of income and as cash provided by operations in the consolidated statements of cash flows.

The following table sets forth our share of DIRECTV’s earnings included in “Equity in net income of affiliates” and cash distributions received from DIRECTV prior to disposition:

Three months ended Nine months ended

September 30, September 30,

2025 2024 2025 2024

7 unchanged sentences

$ — $ 623 $ 1,926 $ 1,883

For the three and six months ended June 30, 2025, we billed DIRECTV approximately $ 116 and $ 240 under commercial arrangements and transition service agreements, which were recorded as a reduction to the operations and support expenses incurred.

At June 30, 2025 , we had accounts receivable from DIRECTV of $ 205 and accounts payable to DIRECTV of $ 50 .

On July 2, 2025, we completed the sale of our interest in DIRECTV to TPG.

Upon close, we will record a current note receivable of approximately $ 3,600 , which we expect to receive the majority of by the end of 2025, and a long-term receivable of $ 500 .

We expect to record a significant gain on the sale, whose amount will be dependent on transition service agreements, indemnifications and other tax items.

Prior to disposition, we billed DIRECTV approximately $ 240 under commercial arrangements and transition service agreements, which were recorded as a reduction to the operations and support expenses incurred through June 30, 2025.

SUPPLIER AND VENDOR FINANCING PROGRAMS

6 unchanged sentences

We do not have pledged assets or other guarantees under our supplier financing program.

Suppliers had elected to sell to the third-party financial institutions $ 3,461 and $ 2,498 of our outstanding payment obligations as of June 30, 2025 and December 31, 2024, respectively.

Suppliers had elected to sell to the third-party financial institutions $ 4,455 and $ 2,498 of our outstanding payment obligations as of September 30, 2025 and December 31, 2024, respectively.

These amounts are included in “Accounts payable and accrued liabilities” on our consolidated balance sheets.

2 unchanged sentences

We also have arrangements with suppliers of handset inventory that allow us to extend the stated payment terms by up to 90 days at an additional cost to us (variable rate extension fee).

We had $ 4,235 of direct supplier financing outstanding as of June 30, 2025 and $ 6,272 as of December 31, 2024, which are included in “Accounts payable and accrued liabilities” on our consolidated balance sheets.

We had $ 3,992 of direct supplier financing outstanding as of September 30, 2025 and $ 6,272 as of December 31, 2024, which are included in “Accounts payable and accrued liabilities” on our consolidated balance sheets.

Our direct supplier financing is reported as operating activities in our statements of cash flows when paid.

2 unchanged sentences

Additionally, in connection with capital improvements and the acquisition of other productive assets, we negotiate favorable payment terms of 120 days or more.

We refer to these arrangements as vendor financing, with the

JUNE 30, 2025

We refer to these arrangements as vendor financing, with the balances and activities including equipment and software arrangements.

Vendor financing payments are reported as financing

SEPTEMBER 30, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

balances and activities including equipment and software arrangements.

Vendor financing payments are reported as financing activities in our statements of cash flows when paid.

For the six months ended June 30, 2025 and 2024, we recorded vendor financing commitments of $ 831 and $ 523 , respectively.

We had $ 1,916 of vendor financing payables at June 30, 2025, with $ 1,193 included in “Accounts payable and accrued liabilities” and $ 1,448 of vendor financing payables at December 31, 2024, with $ 749 included in “Accounts payable and accrued liabilities.”

activities in our statements of cash flows when paid.

For the nine months ended September 30, 2025 and 2024, we recorded vendor financing commitments of $ 1,014 and $ 581 , respectively.

We had $ 1,674 of vendor financing payables at September 30, 2025, with $ 908 included in “Accounts payable and accrued liabilities” and $ 1,448 of vendor financing payables at December 31, 2024, with $ 749 included in “Accounts payable and accrued liabilities.”

ADDITIONAL FINANCIAL INFORMATION

2 unchanged sentences

The following table summarizes cash and cash equivalents and restricted cash balances contained on our consolidated balance sheets:

June 30, December 31,

September 30, December 31,

2025 2024 2024 2023

5 unchanged sentences

The following table summarizes cash paid during the periods for interest and income taxes:

Six months ended

Nine months ended

September 30,

Cash paid (received) during the period for:

2 unchanged sentences

The following table summarizes capital expenditures:

Six months ended

Nine months ended

September 30,

Purchase of property and equipment $ 13,940 $ 13,301

2 unchanged sentences

The following table summarizes acquisitions, net of cash acquired:

Six months ended

Nine months ended

September 30,

Business acquisitions $ — $ —

2 unchanged sentences

Total Acquisitions $ 47 $ 322

1 Total capitalized interest was $ 111 and $ 199 for the six months ended June 30, 2025 and 2024, respectively.

1 Total capitalized interest was $ 167 and $ 288 for the nine months ended September 30, 2025 and 2024, respectively.

Preferred Equity Transactions

2 unchanged sentences

The Telco Class A-4 interests can be called at issue price beginning

JUNE 30, 2025

SEPTEMBER 30, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

3 unchanged sentences

The shares had a total liquidation preference of € 2.0 billion and were redeemed for $ 2,075 .

Pending Acquisition

Pending Acquisitions

On August 25, 2025, we agreed to purchase FCC licenses in the 600 MHz and 3.45 GHz bands from EchoStar Corporation for approximately $ 23,000 , subject to certain adjustments.

The transaction is expected to close in the first half of 2026 and is subject to regulatory approval and other closing conditions.

The FCC licenses will be used to expand our 5G network, meet future capacity demands and support future wireless communications services.

We signed a short-term spectrum manager lease on the 3.45 GHz spectrum.

We expect these licenses will be deployed in cell sites covering nearly two-thirds of the U.S.

population by mid-November 2025.

On May 21, 2025, we agreed to acquire substantially all of Lumen’s mass markets fiber business for $ 5,750 cash, subject to purchase price adjustments.

At the time of signing, the pending acquisition covered approximately 1 million fiber customers, and also included fiber network assets that reach more than 4 million fiber locations.

The transaction is expected to close in the first half of 2026, pending regulatory approval and other customary closing conditions.

JUNE 30, 2025

At the time of signing, the pending acquisition covered approximately one million fiber customers, and also included fiber network assets that reached more than four million fiber locations.

The transaction is expected to close in early 2026, pending regulatory approval and other customary closing conditions.

SEPTEMBER 30, 2025

Management’s Discussion and Analysis of Financial Condition and Results of Operations

9 unchanged sentences

Percentage increases and decreases that are not considered meaningful are denoted with a dash.

Second Quarter Six-Month Period

Third Quarter Nine-Month Period

Percent Percent

23 unchanged sentences

The Latin America segment provides wireless services and equipment in Mexico.

JUNE 30, 2025

SEPTEMBER 30, 2025

Management’s Discussion and Analysis of Financial Condition and Results of Operations- Continued

3 unchanged sentences

Additional analysis is discussed in our “Segment Results” section.

Second Quarter Six-Month Period

Third Quarter Nine-Month Period

Percent Percent

10 unchanged sentences

Interest expense 1,700 1,675 1.5 5,013 5,098 (1.7)

Equity in net income of affiliates 485 348 39.4 1,925 643 —

Equity in net income (loss) of affiliates

(20) 272 — 1,905 915 —

Other income (expense) — net

2 unchanged sentences

Net Income 9,677 145 — 19,230 7,845 —

Net Income Attributable to AT&T 4,500 3,597 25.1 8,851 7,042 25.7

Net Income Attributable to

Net Income (Loss) Attributable

9,314 (174) — 18,165 6,868 —

Operating revenues increased in the second quarter and for the first six months of 2025, reflecting higher Mobility and Consumer Wireline revenues, partially offset by declines in Business Wireline and Mexico, which included unfavorable foreign exchange impacts .

Operations and support expenses increased in the second quarter and for the first six months of 2025, primarily due to higher Mobility equipment costs resulting from increased wireless equipment sales volumes and higher network-related costs.

These increases were partially offset by expense declines from our continued transformation efforts and higher restructuring charges in the prior year.

Also contributing to decreases for the first six months was the absence of expenses from our cybersecurity business that was contributed to a new cybersecurity joint venture, LevelBlue, in the second quarter of 2024.

Depreciation and amortization expense increased in the second quarter and for the first six months of 2025, primarily due to ongoing capital spending for strategic initiatives such as fiber and network upgrades, partially offset by lower depreciation impacts from our Open RAN network modernization efforts.

Operating income increased in the second quarter and for the first six months of 2025.

Our operating income margin in the second quarter increased from 19.3% in 2024 to 21.1% in 2025 and for the first six months increased from 19.4% in 2024 to 19.9% in 2025.

Interest expense decreased in the second quarter and for the first six months of 2025, primarily due to lower debt balances, partially offset by lower capitalized interest associated with spectrum acquisitions.

Equity in net income of affiliates increased in the second quarter and for the first six months of 2025.

The increases reflect cash distributions received by AT&T in excess of the carrying amount of our investment in DIRECTV (see Note 9).

We sold our interest in DIRECTV to TPG Capital on July 2, 2025.

JUNE 30, 2025

Net Income (Loss) Attributable to

$ 9,278 $ (226) — % $ 18,137 $ 6,715 — %

Operating revenues increased in the third quarter and for the first nine months of 2025, reflecting higher Mobility and Consumer Wireline revenues, partially offset by declines in Business Wireline.

Operating revenues in Mexico were higher in the third quarter but lower for the first nine months, reflecting unfavorable foreign exchange impacts during the first half of 2025 .

Operations and support expenses decreased in the third quarter and for the first nine months of 2025, primarily due to a $4,422 noncash goodwill impairment recorded in 2024.

Also contributing to lower operating expenses were expense declines from our continued transformation efforts, lower content licensing fees and lower year-to-date restructuring costs.

Partially offsetting these declines were higher Mobility equipment costs resulting from increased wireless equipment sales volumes, higher network-related costs and approximately $440 of apportioned legal settlements during the third quarter of 2025.

Depreciation and amortization expense increased in the third quarter and for the first nine months of 2025, primarily due to ongoing capital spending for strategic initiatives such as fiber and network upgrades, partially offset by lower depreciation impacts from our Open RAN network modernization efforts.

We expect fourth-quarter 2025 depreciation expense to be lower than the comparable prior-year quarter, and full-year expense to be consistent with the prior year as certain legacy assets become fully depreciated.

Operating income increased in the third quarter and for the first nine months of 2025.

Our operating income margin in the third quarter increased from 7.0% in 2024 to 19.9% in 2025 and for the first nine months increased from 15.2% in 2024 to 19.9% in 2025.

Interest expense increased in the third quarter and decreased for the first nine months of 2025.

The increase in the third quarter was primarily due to lower capitalized interest associated with spectrum acquisitions.

The decrease for the first nine months was

SEPTEMBER 30, 2025

Management’s Discussion and Analysis of Financial Condition and Results of Operations- Continued

Dollars in millions except per share amounts

Other income (expense) – net increased in the second quarter and for the first six months of 2025.

The increases were primarily due to a second-quarter 2025 gain on prior disposition, and for the first six months, first-quarter 2024 noncash impairment charges for a held-for-sale business and our SKY Mexico equity investment.

Partially offsetting the increases were lower pension and postretirement benefit credits and lower returns on other benefit-related investments for the six-month period.

Other income (expense) - net in the third quarter of 2025, will include a gain recognized on our sale of DIRECTV, which we expect to be in the range of $5,500, dependent on transition service agreements, indemnifications and other tax items (see Note 9).

Income tax expense increased in the second quarter and for the first six months of 2025, primarily due to higher income before income tax.

Our effective tax rate was 20.3% in the second quarter and 21.0% for the first six months of 2025, versus 22.4% and 22.7% in the comparable periods in the prior year, r eflecting larger discrete state tax benefits in 2025.

primarily due to lower average debt balances, partially offset by lower capitalized interest associated with spectrum acquisitions.

Equity in net income (loss) of affiliates decreased in the third quarter and increased for the first nine months of 2025.

The decrease for the quarter is primarily due to the sale of our interest in DIRECTV to TPG Capital on July 2, 2025.

The increase for the first nine months is attributable to the cash distributions received by AT&T in excess of the carrying amount of our investment in DIRECTV prior to disposition (see Note 9).

Other income (expense) – net increased in the third quarter and for the first nine months of 2025.

The increase in the quarter was primarily due to a gain of approximately $5,500 recognized on the sale of our interest in DIRECTV (see Note 9).

For the first nine months, the increase was also driven by a second-quarter 2025 gain on a prior disposition and first-quarter 2024 noncash impairment charges for a held-for-sale business and our SKY Mexico equity investment.

Partially offsetting the increases in the quarter and for the first nine months were lower pension and postretirement benefit credits and lower returns on other benefit-related investments.

Income tax expense decreased in the third quarter and for the first nine months of 2025, primarily due to a lower effective tax rate driven by a tax-free gain on sale of DIRECTV in 2025 and a goodwill impairment in 2024, which is not deductible for tax purposes.

Our effective tax rate was 9.2% in the third quarter and 15.4% for the first nine months of 2025, versus 89.9% and 31.1% in the comparable periods in the prior year, reflecting the nonrecognition of income taxes on the DIRECTV gain and larger discrete state tax benefits in 2025, and the goodwill impairment in 2024, which was not deductible for tax purposes.

Segment Results Our segments are comprised of strategic business units or other operations that offer products and services to different customer segments over various technology platforms and/or in different geographies that are managed accordingly.

2 unchanged sentences

generally accepted accounting principles (GAAP).

COMMUNICATIONS SEGMENT Second Quarter Six-Month Period

COMMUNICATIONS SEGMENT Third Quarter Nine-Month Period

Percent Percent

10 unchanged sentences

Total Segment Operating Income $ 7,096 $ 7,156 (0.8) % $ 21,152 $ 20,906 1.2 %

Operating revenues increased in the second quarter and for the first six months of 2025, primarily driven by increases in our Mobility and Consumer Wireline business units, partially offset by declines in our Business Wireline business unit, which reflects lower demand for legacy services.

Also offsetting revenue increases for the first six months was the absence of revenues from our cybersecurity business that was contributed to a new cybersecurity joint venture, LevelBlue, in the second quarter of 2024.

Operating income increased in the second quarter and for the first six months of 2025.

Our Communications segment operating income margin in the second quarter decreased from 24.5% in 2024 to 23.8% in 2025 and for the first six months decreased from 23.9% in 2024 to 23.7% in 2025.

Our Communications EBITDA margin in the second quarter decreased from 41.2% in 2024 to 40.7% in 2025 and for the first six months increased from 40.5% in 2024 to 40.6% in 2025.

JUNE 30, 2025

Operating revenues increased in the third quarter and for the first nine months of 2025, primarily driven by increases in our Mobility and Consumer Wireline business units, partially offset by declines in our Business Wireline business unit, which reflects lower demand for legacy services.

Operating income decreased in the third quarter and increased for the first nine months of 2025.

Our Communications segment operating income margin in the third quarter decreased from 24.6% in 2024 to 24.0% in 2025 and for the first nine months decreased from 24.2% in 2024 to 23.8% in 2025.

Our Communications EBITDA margin in the third quarter remained consistent at 41.2% in 2024 and 2025 and for the first nine months increased from 40.7% in 2024 to 40.8% in 2025.

SEPTEMBER 30, 2025

Management’s Discussion and Analysis of Financial Condition and Results of Operations- Continued

2 unchanged sentences

Mobility Results

Second Quarter Six-Month Period

Third Quarter Nine-Month Period

Percent Percent

10 unchanged sentences

The following tables highlight other key measures of performance for Mobility:

June 30, Percent

September 30, Percent

(in 000s) 2025 2024 Change

5 unchanged sentences

118,982 116,066 2.5 %

1 Excludes migrations between wireless subscriber categories, including connected devices, and acquisition-related activity during the period.

JUNE 30, 2025

1 Wireless subscribers and net additions exclude customers with free lines provided under promotional pricing until such lines are converted to paying lines.

SEPTEMBER 30, 2025

Management’s Discussion and Analysis of Financial Condition and Results of Operations- Continued

1 unchanged sentence

Mobility Net Additions

Second Quarter Six-Month Period

Third Quarter Nine-Month Period

Percent Percent

11 unchanged sentences

0.92 % 0.78 % 14 BP 0.87 % 0.73 % 14 BP

1 Excludes migrations between wireless subscriber categories, including connected devices, and acquisition-related activity during the period.

1 In addition to postpaid phones, includes tablets and wearables and other.

Tablet net adds (losses) were 63 and 64 for the quarters ended June 30, 2025 and 2024 and 59 and 52 for the first six months ended June 30, 2025 and 2024.

Wearables and other net adds (losses) were 15 and 110 for the quarters ended June 30, 2025 and 2024 and (15) and 162 for the first six months ended June 30, 2025 and 2024.

Tablet net adds (losses) were (45) and (21) for the quarters ended September 30, 2025 and 2024 and 14 and 31 for the nine months ended September 30, 2025 and 2024.

Wearables and other net adds (losses) were (32) and 47 for the quarters ended September 30, 2025 and 2024 and (47) and 209 for the nine months ended September 30, 2025 and 2024.

2 Excludes migrations between wireless subscriber categories, including connected devices, and acquisition-related activity during the period.

3 Wireless subscribers and net additions exclude customers with free lines provided under promotional pricing until such lines are converted to paying lines.

4 Calculated by dividing the aggregate number of wireless subscribers who canceled service during a month by the total number of wireless subscribers at the beginning of that month.

The churn rate for the period is equal to the average of the churn rate for each month of that period.

Service revenue increased in the second quarter and for the first six months of 2025, largely due to postpaid phone average revenue per subscriber (ARPU) growth and subscriber gains.

ARPU increased in the second quarter and for the first six months of 2025, reflecting pricing actions and customers migrating to higher priced plans.

Service revenue increased in the third quarter and for the first nine months of 2025, largely due to subscriber gains partially offset by promotional activity.

Revenue comparisons in the third quarter were also impacted by approximately $90 of one-time noncash revenues related to administrative fees in 2024.

Average revenue per subscriber (ARPU) decreased in the third quarter and increased for the first nine months of 2025.

The decrease in the quarter includes the impact of one-time revenues related to administrative fees in 2024, as well as promotional activity and our success in attracting customers in underpenetrated segments with lower ARPUs, but attractive lifetime values, such as age 55-plus in our “value customers.” The increase for the first nine months was pressured by growth in our base of converged customers, who are typically eligible for service discounts.

The effective management of subscriber churn is critical to our ability to maximize revenue growth and to maintain and improve margins.

Postpaid churn and postpaid phone-only churn were higher in the second quarter and for the first six months of 2025, driven by a normalization of customers reaching the end of their equipment promotional plans and increased competition.

Equipment revenue increased in the second quarter and for the first six months of 2025, primarily driven by higher wireless device sales volumes.

Operations and support expenses increased in the second quarter and for the first six months of 2025, primarily due to higher equipment costs driven by higher wireless sales volumes.

The increase also reflected higher advertising due to the launch of a new campaign in the first quarter, promotion costs and network costs.

Depreciation expense increased in the second quarter and for the first six months of 2025, primarily due to ongoing capital spending for network upgrades and expansion, partially offset by lower depreciation impacts from our network modernization efforts.

Operating income increased in the second quarter and for the first six months of 2025.

Our Mobility operating income margin in the second quarter decreased from 32.8% in 2024 to 31.7% in 2025 and for the first six months decreased from 32.1% in 2024 to 31.5% in 2025.

Our Mobility EBITDA margin in the second quarter decreased from 44.9% in 2024 to 43.4% in 2025 and for the first six months decreased from 44.2% in 2024 to 43.2% in 2025, driven by the increase in low margin equipment revenues.

JUNE 30, 2025

Postpaid churn and postpaid phone-only churn were higher in the third quarter and for the first nine months of 2025, partially driven by an increase in our customer base that reached the end of device financing periods, which normalized as we exited the quarter.

The increase in churn in the quarter was primarily driven by increased competition.

Equipment revenue increased in the third quarter and for the first nine months of 2025, primarily driven by higher wireless device sales volumes.

Operations and support expenses increased in the third quarter and for the first nine months of 2025, primarily due to higher equipment costs driven by higher wireless sales volumes.

The increase also reflected higher advertising due to the launch of a new campaign in the first quarter, and higher network costs that were partially offset by lower content licensing fees and expense declines from transformation efforts.

SEPTEMBER 30, 2025

Management’s Discussion and Analysis of Financial Condition and Results of Operations- Continued

Dollars in millions except per share amounts

Depreciation expense increased in the third quarter and for the first nine months of 2025, primarily due to ongoing capital spending for network upgrades and expansion, partially offset by lower depreciation impacts from our network modernization efforts.

Operating income increased in the third quarter and for the first nine months of 2025.

Our Mobility operating income margin in the third quarter decreased from 33.3% in 2024 to 32.8% in 2025 and for the first nine months decreased from 32.5% in 2024 to 31.9% in 2025.

Our Mobility EBITDA margin in the third quarter decreased from 45.1% in 2024 to 44.7% in 2025 and for the first nine months decreased from 44.5% in 2024 to 43.7% in 2025, driven by the increase in low margin equipment revenues.

Business Wireline Results

Second Quarter Six-Month Period

Third Quarter Nine-Month Period

Percent Percent

12 unchanged sentences

$ (354) $ (43) — % $ (653) $ 123 — %

Legacy and other transitional services revenues decreased in the second quarter and for the first six months of 2025, driven by lower demand for legacy and VPN services, which we expect to continue.

Revenue declines for the first six months also reflect the absence of revenues from our cybersecurity business that was contributed to LevelBlue in the second quarter of 2024.

Legacy and other transitional services revenues decreased in the third quarter and for the first nine months of 2025, driven by lower demand for legacy and VPN services, which we expect to continue.

These revenue declines were partially offset by targeted pricing actions in the first quarter of 2025.

Fiber and advanced connectivity services revenues increased in the second quarter and for the first six months of 2025, driven by higher fiber and fixed wireless revenues.

Equipment revenues decreased in the second quarter and for the first six months of 2025.

Operations and support expenses decreased in the second quarter and for the first six months of 2025, primarily driven by lower personnel and customer support costs associated with ongoing transformation initiatives and lower network-related costs.

Decreases for the first six months were also driven by the contribution of our cybersecurity business.

Fiber and advanced connectivity services revenues increased in the third quarter and for the first nine months of 2025, driven by higher fiber and fixed wireless revenues.

Equipment revenues decreased in the third quarter and for the first nine months of 2025.

Operations and support expenses decreased in the third quarter and for the first nine months of 2025, primarily driven by lower personnel and customer support costs associated with ongoing transformation initiatives, which were partially offset by favorable vendor settlements in the prior-year third quarter.

As part of our transformation activities, we expect operations and support expense improvements through the remainder of 2025 as we further right size our operations in alignment with the strategic direction of the business.

Depreciation expense increased in the second quarter and for the first six months of 2025, primarily due to ongoing capital investment for strategic initiatives such as fiber, which we expect to continue through the remainder of 2025.

Operating income decreased in the second quarter and for the first six months of 2025.

Our Business Wireline operating income margin in the second quarter decreased from 2.1% in 2024 to (4.7)% in 2025 and for the first six months decreased from 1.7% in 2024 to (3.4)% in 2025.

Our Business Wireline EBITDA margin in the second quarter decreased from 31.3% in 2024 to 30.6% in 2025 and for the first six months increased from 30.1% in 2024 to 31.0% in 2025.

JUNE 30, 2025

Depreciation expense increased in the third quarter and for the first nine months of 2025, primarily due to ongoing capital investment for strategic initiatives such as fiber, which we expect to continue through the remainder of 2025.

Operating income decreased in the third quarter and for the first nine months of 2025.

Our Business Wireline operating income margin in the third quarter decreased from (0.9)% in 2024 to (8.3)% in 2025 and for the first nine months decreased from 0.9% in 2024 to (5.0)% in 2025.

Our Business Wireline EBITDA margin in the third quarter decreased from 29.4% in 2024 to 27.8% in 2025 and for the first nine months remained consistent at 29.9% in 2024 and 2025.

SEPTEMBER 30, 2025

Management’s Discussion and Analysis of Financial Condition and Results of Operations- Continued

1 unchanged sentence

Consumer Wireline Results

Second Quarter Six-Month Period

Third Quarter Nine-Month Period

Percent Percent

12 unchanged sentences

Broadband Connections

June 30, Percent

September 30, Percent

(in 000s) 2025 2024 Change

3 unchanged sentences

Broadband Net Additions

Second Quarter Six-Month Period

Third Quarter Nine-Month Period

Percent Percent

5 unchanged sentences

2 Excludes the impact of subscriber disconnections resulting from the termination of AIA services in areas with unfavorable regulatory requirements in the first quarter of 2025.

Broadband revenues increased in the second quarter and for the first six months of 2025, driven by increases in fiber revenues of 18.9% and 19.0%.

Broadband revenues increased in the third quarter and for the first nine months of 2025, driven by increases in fiber revenues of 16.8% and 18.2%.

Higher fiber revenues reflect an increase in fiber customers, which we expect to continue as we invest further in building our fiber footprint, and higher ARPU.

This increase was partially offset by declines in copper-based broadband services.

Legacy voice and data services revenues decreased in the second quarter and for the first six months of 2025, reflecting the continued decline in demand for these services in favor of other technologies, such as wireless and fiber services.

Other service and equipment revenues decreased in the second quarter and for the first six months of 2025, reflecting the continued decline in the number of VoIP customers.

Operations and support expenses were flat in the second quarter and decreased for the first six months of 2025, primarily driven by lower customer support and content licensing costs, largely offset by higher network-related costs and higher marketing costs.

JUNE 30, 2025

This increase also includes growth in AIA revenues and was partially offset by declines in copper-based broadband services.

Legacy voice and data services revenues decreased in the third quarter and for the first nine months of 2025, reflecting the continued decline in demand for these services in favor of other technologies, such as wireless and fiber services.

Other service and equipment revenues decreased in the third quarter and for the first nine months of 2025, reflecting the continued decline in the number of VoIP customers.

Operations and support expenses decreased in the third quarter and for the first nine months of 2025, primarily driven by lower customer support costs and content licensing fees, largely offset by higher network-related costs and higher marketing costs.

SEPTEMBER 30, 2025

Management’s Discussion and Analysis of Financial Condition and Results of Operations- Continued

Dollars in millions except per share amounts

Depreciation expense increased in the second quarter and for the first six months of 2025, primarily due to ongoing capital spending for strategic initiatives such as fiber and network upgrades and expansion, which we expect to continue through the remainder of 2025.

Operating income increased in the second quarter and for the first six months of 2025.

Our Consumer Wireline operating income margin in the second quarter increased from 5.5% in 2024 to 9.5% in 2025 and for the first six months increased from 5.9% in 2024 to 9.7% in 2025.

Our Consumer Wireline EBITDA margin in the second quarter increased from 32.8% in 2024 to 36.5% in 2025 and for the first six months increased from 32.7% in 2024 to 36.7% in 2025.

LATIN AMERICA SEGMENT Second Quarter

Six-Month Period

Depreciation expense increased in the third quarter and for the first nine months of 2025, primarily due to ongoing capital spending for strategic initiatives such as fiber and network upgrades and expansion, which we expect to continue through the remainder of 2025.

Operating income increased in the third quarter and for the first nine months of 2025.

Our Consumer Wireline operating income margin in the third quarter increased from 5.7% in 2024 to 9.1% in 2025 and for the first nine months increased from 5.9% in 2024 to 9.5% in 2025.

Our Consumer Wireline EBITDA margin in the third quarter increased from 32.8% in 2024 to 36.3% in 2025 and for the first nine months increased from 32.7% in 2024 to 36.5% in 2025.

LATIN AMERICA SEGMENT Third Quarter

Nine-Month Period

2025 2024 Percent Change 2025 2024 Percent Change

10 unchanged sentences

The following tables highlight other key measures of performance for Mexico:

June 30, Percent

September 30, Percent

(in 000s) 2025 2024 Change

4 unchanged sentences

Mexico Wireless Net Additions

Second Quarter

Six-Month Period

Third Quarter

Nine-Month Period

Percent Percent

4 unchanged sentences

Total Mexico Wireless Net Additions 306 275 11.3 % 573 595 (3.7) %

Service revenues decreased in the second quarter and for the first six months of 2025, reflecting unfavorable foreign exchange impacts, partially offset by growth in subscribers and ARPU.

Equipment revenues decreased in the second quarter and for the first six months of 2025, reflecting unfavorable foreign exchange impacts, partially offset by higher equipment sales.

Operations and support expenses decreased in the second quarter and for the first six months of 2025, primarily due to favorable foreign exchange impacts, partially offset by increased equipment and selling costs resulting from higher sales.

JUNE 30, 2025

Service revenues increased in the third quarter and decreased for the first nine months of 2025.

The increase in the quarter was primarily due to growth in subscribers and favorable foreign exchange impacts.

The decrease for the first nine months reflects unfavorable foreign exchange impacts in the first half of 2025, partially offset by growth in subscribers and ARPU.

Equipment revenues increased in the third quarter and decreased for the first nine months of 2025.

The increase in the quarter was primarily due to higher equipment sales and favorable foreign exchange impacts.

The decrease for the first nine months reflects unfavorable foreign exchange impacts in the first half of 2025, partially offset by higher equipment sales.

SEPTEMBER 30, 2025

Management’s Discussion and Analysis of Financial Condition and Results of Operations- Continued

Dollars in millions except per share amounts

Depreciation and amortization expense decreased in the second quarter and for the first six months of 2025, primarily due to favorable foreign exchange impacts.

Operating income increased in the second quarter and for the first six months of 2025.

Our Mexico operating income margin in the second quarter increased from 0.5% in 2024 to 4.4% in 2025 and for the first six months increased from 0.4% in 2024 to 4.4% in 2025.

Our Mexico EBITDA margin in the second quarter increased from 16.1% in 2024 to 19.1% in 2025 and for the first six months increased from 16.5% in 2024 to 19.5% in 2025.

Operations and support expenses increased in the third quarter and decreased for the first nine months of 2025.

The increase in the quarter was primarily due to higher equipment costs, bad debt expense from higher sales and unfavorable exchange rates.

The decrease for the first nine months was primarily due to favorable foreign exchange impacts, partially offset by increased equipment and selling costs.

Depreciation and amortization expense increased in the third quarter and decreased for the first nine months of 2025.

The increase in the quarter was primarily due to accelerated depreciation on certain network assets.

The decrease for the first nine months was primarily due to foreign exchange impacts.

Operating income increased in the third quarter and for the first nine months of 2025.

Our Mexico operating income margin in the third quarter increased from 1.0% in 2024 to 2.0% in 2025 and for the first nine months increased from 0.6% in 2024 to 3.6% in 2025.

Our Mexico EBITDA margin in the third quarter increased from 16.4% in 2024 to 18.2% in 2025 and for the first nine months increased from 16.5% in 2024 to 19.0% in 2025.

COMPETITIVE AND REGULATORY ENVIRONMENT

3 unchanged sentences

On July 4, 2025, the One Big Beautiful Bill Act was enacted, which restores or makes permanent certain expiring business tax provisions from the Tax Cuts and Jobs Act of 2017.

We do not anticipate the legislation to materially impact our income tax expense, but expect that it will have a material impact on cash taxes paid.

The legislation did not materially impact our income tax expense, but we expect that it will result in a material decrease to cash taxes paid relative to our expectations.

For further discussion of regulations impacting AT&T and its subsidiaries, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operation—Regulatory Landscape” in our Annual Report on Form 10-K for the year-ended December 31, 2024.

LIQUIDITY AND CAPITAL RESOURCES

For six months ended June 30,

For nine months ended September 30,

Cash provided by operating activities

2 unchanged sentences

(14,433) (12,127)

Cash used in financing activities

Cash provided by (used in) financing activities

2,391 (18,855)

June 30, December 31,

September 30, December 31,

Cash and cash equivalents

1 unchanged sentence

139,468 123,532

We had $10,499 in cash and cash equivalents available at June 30, 2025, increasing $7,201 since December 31, 2024.

We had $20,272 in cash and cash equivalents available at September 30, 2025, increasing $16,974 since December 31, 2024.

Cash and cash equivalents included cash of $4,359 and money market funds and other cash equivalents of $15,913.

1 unchanged sentence

and may be subject to restrictions on repatriation.

For the first six months of 2025, cash inflows were primarily provided by cash receipts from operations, including cash from our sale and transfer of our receivables to third parties, and distributions from DIRECTV.

Our cash and cash equivalents at September 30, 2025 was elevated in anticipation of the consummation of announced transactions (see Note 11).

For the first nine months of 2025, cash inflows were primarily provided by cash receipts from operations, including cash from our sale and transfer of our receivables to third parties, and distributions from DIRECTV.

These inflows exceeded cash used to meet the needs of the business, including, but not limited to, payment of operating expenses, including higher device payments from higher sales volumes.

1 unchanged sentence

We maintain availability under our credit facilities and our commercial paper program to meet our short-term liquidity requirements.

Cash Provided by Operating Activities

During the first six months of 2025, cash provided by operating activities was $18,812, compared to $16,640 for the first six months of 2024, with increases resulting from higher cash flows related to DIRECTV, including a first-quarter 2025 dividend of $1,138, and operational growth.

JUNE 30, 2025

SEPTEMBER 30, 2025

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements